The ultimate problem with fiat money is that they don't have any manufacturing cost. Under a gold standard, each dollar was partly backed by gold, which has a manufacturing cost, so money creation is more or less the same as any other type of job
Fiat money worth nothing, and central banks have been using this nothing in exchange for almost everything since 1971. But the collapse of this system require that people first understand this grand scale scam (which is very difficult for human of average IQ), and then have an alternative way to do commerce (now we have bitcoin, but if used at large scale, the scalability will become a problem)
And the central banks will not sit there watching, they will do whatever necessary to prevent such a collapse, like raise the interest rate to 20+% (anyway they use printed money to pay for those interest), use gold/silver/real estate to back their fiat money (they still have large amount of gold reserve), or bribing the congress man to pass many different laws to outlaw the usage of other currencies
From the government point of view, bitcoin can help them to get rid of those debt based fiat, thus become debt free, but they also lose the ability to tax people and regulate the money flow, it is still unknown what kind of position they will take
I guess that in foreseeable future, fiat money will still be used widely, and bitcoin becomes a sponge to suck in extra fiat money supply to reduce the risk of fiat money inflation, and since bitcoin appreciate so fast, it will never be used at large scale at domestic commerce, more likely to become a digital asset and used to store and move wealth between countries
I think this will all happen slowly, over time evolving and adapting. There are multiple phases to this evolution, we are currently in development and infrastructure building phase. It is my belief, I have no facts or evidence to support this, intent is to drive society and assets into the blockchain.
This will be accomplished by continuously raising btc<>usd ratio.
I also think states will takeover control of the blockchain through centralization and for "the good of the people"
Scalability non issue. Many threads about this already.
Tax non issue, moving to consumption tax.
The reason I became so suspicious of bitcoin is because of number of senators, congressmen, federal reserve representatives, former mint
chairman, "economists" and hedge fund managers coming out in favor of bitcoin and blockchain. Has been unending stream for last 6 months
or so. They are all in favor and support bitcoin protocol. Tells me all I need to know.
They see bitcoin protocol as SOLUTION to existing problems. Carrot and Stick.
