I did explain the problem with your logic.

GOLD IS HARD TO  USE IN TRANSACTIONS.  It has significant disadvantages and cost.   This is what lead to the usage of gold backed notes.  Bitcoin suffer no such disadvantages.  Bitcoin banks using Bitcoins as a reserve to issue private script are unlikely to be popular as simply holding real Bitcoins is easier and less risky.  Unlike gold there isn't a compelling reason to take on the additional counterparty risk.

Also without a central bank able to print infinite amounts of money and be the lender of last resort many of those banks will fail and when they fail depositors will lose everything.  This will further reduce the real return.   Net change in purchasing power = interest - inflation - losses.

Simple version:
a) Bitcoins in bank = losing purchasing power daily.
b) Bitcoins not in bank = gaining purchasing power daily.
Your conclusion: The vast majority of people will knowingly opt for "a".

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But you just said there would be inflation and the inflation would be higher than the interest.  I would simply keep my real Bitcoins and while the nominal number won't change the purchasing power of it will.   Your system assumes everyone is stupid and opt for inflationary non-Bitcoin tokens instead of the "real thing".  Even if people temporarily did that, the scenario requires them to be stupid over an extended period of time. They would need to see that year in and year out they have a decline in real purchasing power and continue to not act by taking the very easy step of taking their coins out of the bank.

Or you could just keep your gold and were immune to the inflationary effect.  Of course paying with gold was difficult, keeping your gold safe was also difficult.  Bitcoin however makes paying direct with Bitcoin easy.  There is no need to put you Bitcoins in some bank which will issue fiat currency using it as a reserve.  Of course you are free to CHOOSE to do so but others are free to not.  If these fiat issued currencies end up inflationary well it will make people less likely to choose that option.

But if you borrow BTC from a bank to make a purchase, the seller will expect to receive the actual BTC, not a BTC bank credit. So the scope for FRB is far more limited.

It seems that you struggle to understand what decentralized means.
If a bank, an institute, an organization, a country of even me issue money then that's not a decentralized economy. Bitcoins are issued by themself. There is absolutely noone issuing them. If you can't see how revolutionary is that then i guess it can't be helped anyway.

Gresham's law happens when you have currencies of different value, but some idiot is accepting them both at the same value.  (or some idiot nation is demanding via law that *everybody* be such an idiot).

It naturally happens that the idiots then wind up with the currency that has the lesser value, whilst all of the higher-valued currency goes elsewhere, where non-idiots will give you more stuff for it.  So 'bad money drives out good' refers to a nation that demands that (say) a debased coin with half the silver content be considered 'the same' as an earlier coin that was substantially more silver.  If people can get more stuff for the silver money outside of that country than they can for the debased coin, then all of the silver money is 'driven out' of the country.

Could someone explain me what the time limits for posting for various ranks are? I can't seem to find this info anywhere...for example my current limit is 360 sec,...thanks in advance for any answers!

Спасибо. Просто удивляюсь, как люди пишут подобные статьи, и не удосуживаются привести адрес, о котором как бы и идёт речь.

One problem with the OP's logic is that during the 'free banking era' many different banks were issuing 'dollars' that in theory were supposed to trade equally.  But due to some banks being more sound than others, some notes were manifestly worth more than face value and some manifestly less.  Theory and practice differed according to Gresham's law, leading eventually to the dissolution of that system as a non-working mistake.

If national and privately-issued (crypto-) currencies are allowed to float freely against each other, then Gresham's law does not apply.

How about you come up with something perfect,  GOD!?

So by decentrilization you mean different banks issuing money. I guess we are still in a decentralized economy then since different nations / organizations / banks are still issuing money. Guess what. No.

Bitcoins are not heavy at all
Bitcoins are easy to transfer (much faster and easier than most currencies, especially if you consider international trades, not to mention cheaper as well)
Bitcoins can not be tampered with
Bitcoins are inflation resistant.

So, moving from bitcoin to paper bitcoins makes not much sense at all, moving from bitcoin to a banking scam is even more unlikely.

Also the reason people stepped away from gold as a currency was several reasons, including but not limited to:

1) gold is heavy.
2) goold coins where often scraped and molten to more gold, making the gold coin lighter than it should be, but careless people often accepted to coin for it's full value, this was later slowed down by adding markings on the sides of coins, so it's easier to see a coin has been tampered with.
3) it was easier and safer to leave your gold at the goldsmith/banker and pass the 'proof of deposit' around than it was to retrieve the gold from the goldsmith/banker, give the gold to the merchant, an do have the merchant put it back at the bank.

You clearly don't understand that 21 million bitcoins does not limit transactions at all.

Let's say it's the year 2300 and there's only 1 bitcoin left in the whole world. (All others have been lost due to wallets being lost etc.) this bitcoin would be worth 1 quadrillion dollars. A pizza would cost $500 due to inflation.

You could buy that pizza with 0.0000000000005 bitcoins

Perhaps I should make my argument more clear.  The implied assumption is that the evolution will go:

Bitcoins -> paper Bitcoins -> central bank

I'm saying it's much more likely to be:

Bitcoins -> paper Bitcoins -> Bitcoins

Sorry but I don't see how you prove that Bitcoin is going to fail.

What do you mean by fail ?

Anyone who uses "paper" Bitcoins deserves to absorb the risk of loss that obviously implies.

Gold was a pretty crappy currency.  There was at least some argument to be made that paper was more convenient to use.  The same can't be said of Bitcoin.