Paper money is really very primitive and requires a *lot* of resources to create and manage.
But bartering (exchanging goods and services without involving money) is still practiced in some locations and scenarios.
Why do you think that BTC being "online" means that paper money will never disappear? Is it because you think that something could threaten the existence of the Internet and so it would be unsafe to rely solely upon money transacted online?
I am not so sure about this.
But IMO, the benefit of bitcoin over credit cards is very big, while the benefit of bitcoin over paper money is quite small.
And I don't think the benefit is big enough to get paper money replaced.
- Bartering is primitive, yet it's a wonderful system especially for small and proximal exchanges. It's ill-equipped for global commerce, though.
- The benefits over credit cards are pretty obvious (e.g. Lower fees, no need to give sensitive personal info, etc.).
- Paper money is *very*expensive. First, you have all the cost of production (e.g. Cultivating the materials which costs a buttload of money), then there's the production cost, the transportation cost (think of all those armored vehicles that routinely fill banks and ATMs, etc.), then there's the cost of both automated and manual security (e.g. Safes, security systems, armed guards and security personnel, etc.). Then you have coined money like pennies, nickels, dimes, quarters, etc. that weigh a ton, and all of that weight requires even more oil and gasoline to transport. You're talking about tens of billions of dollars being spent annually just to preserve the standard of paper money.