I trust the fiats was supposed to have printed limits to keep orderly speculations and maintains good values, but due to greeds in the regulatory systems, the authorities has made the central banks a temporarily Inheritance while still in power of authorization.
For that, they bridges the order of the fiats printed limits as they prints more for their own selves which lingers to a much number of the fiats being printed becoming irregularly viral and speculated abusively and devaluing the printed currencies.
Imagine where some highily profile persons(prominent person) places withdrawal order from the bank were they rejects old printed note/coins and only in request of the Mints.
Does it mean the old printed are for the poor? Or is there lost of values in the Old prints over the Minting?
Still, a highily profile man(prominent person) is attended to in the bank by the cashier's or event the branch bank manager in an honorable and executive manner while the poor and the average man are attended to like they came to beg while in request of their own funds stored in the banks.
If we can compare this Centralized fiats to decentralized cryptocurrencies, we would understand the equality and benefits of storing our funds in cryptocurrencies in the decentralized blockchain networks by which we are the autonomous to decide how we regulates our funds by ourselves unlike the fiats where the authorities tells you what to do with your funds.
This thoughtfulness has really thought me otherwise that those crypto enthusiasts who anticipates/wishes for crypto currencies especially the most dominance (Bitcoin) to be physically felt may actually not know the resultant of inconveniences the future of crypto currencies may hold against us in the future if such agitation is actualized were Bitcoin or Cryptocurrencies are being printed or physically felt. Most definitely we would undergo those segregations and monopolies in the centralized system.
So, let us just keep to enjoy the dividends of the decentralized fund system on digital crypto currencies.
You talked about some interesting points regarding the limitations and inefficiencies of the fiat system, which, to a real degree, economists view reforms carried out by officials that can cause problems like inflation and the inability of an individual to get caught based on his or her status or wealth. This could render currency that has less value and can increase social inequality. And the reason is that celebrities are treated differently compared to ordinary people in financial institutions; it is an example of inequality, really. So, it does really show how the central institution can create different value chains. On the contrary, decentralized cryptocurrencies like Bitcoin solve those problems by creating an atmosphere of control decentralization and making transactions more transparent ,, and they do that absolutely for free. In this way, the distribution of power, without middlemen and without intermediaries, can reduce such conflicts and give ownership to individuals over their financial assets. On the contrary, equally relevant would be complications arising when the system has fully developed. As you showed, if we were to print and formalize all cryptocurrencies as fiat currencies, then we would have further issues, inefficiencies, middlemen, or abuses. This takeaway can be used as a means of pinpointing strengths and weaknesses in both systems. Yes, fiat systems do have their drawbacks, but do bring in certain stability and regulation that the systems are still working to capture. Of course, the balancing act between the benefits of decentralization against monetary policy and economic activity is always a difficult challenge.
Fiats is supposed to have unlimited supply because human populations is unlimited, everyone need to have fiats in order to buy something, so the government need to print more and at the same time not make citizen to lost their trust in fiat.
Although Bitcoin is decentralized and fungible, but you're not entirely correct because banks and government do "segregate" Bitcoin holders. They will treat people who own "dirty Bitcoin" different to people who own Bitcoin from regulated CEX.
Well, technically that's one of the reasons why fiat money was inveted. So that people stop hoarding their gold and that government would have this god-mode on their federal reserve. But that's not really the reason they are printing it more these days. Reason is always a sudden crisis that government needs to deal with promptly.
Because if government that doesn't have fiat money, but something like money that's backed up with gold or bitcoin reserves, that country can collapse during bad times, because it can just ran out. Ideally it doesn't but there are times like the great depression in US on 1933, when Roosevelt made executive order that forced their citizens to sell their gold to government (for paper money) with fixed price. Government needed more of the gold, and citizens had to get something for it, in order for them to keep buying stuff.
You're right, it was for this reason that fiat money was created-to afford more flexibility in monetary management than what the gold-backed system had allowed. The power of governments at the wheel of steering the economy and strongly responding to crises has been a great benefit, sometimes during periods of low economic activity.
The situation you have alluded to, during the financial crisis, is an excellent example of how, by providing government with a tool in fiat money, they may provide a semblance of stability against serious challenges. By allowing the government to raise investment, they were able to finance and support the economic activities necessary for recovery. As to say, it speaks to a larger issue with fiat currencies reliance on governmental surveillance taken to an uncomfortable level and inflation of the currency if done unwise.
Entities such as cryptocurrencies are distributed systems and introduce certain new enhancements that can offer an alternative to fiat systems. They provide transparency and reduce reliance on central authorities, but not without their challenges regarding complexity and flexibility.