The New Technology, page-23

Warning: Long post

I have given this alot of thought for a long time. Very true that some naive optimistic bitcoin investors think that bitcoin/crypto's makes banks redundant. They may not realize that in addition to storing money Banks have the critical role of issuing loans, which under the practices of fiat issued currency, actually does allow them to "print money" built entirely on the faith that you will pay off your loan. When people don't, they go into default and the country spirals into recession. The GFC was caused almost entirely by banks issuing bad debt, which was the driving force behind bitcoins creation and adoption. However, a bitcoin based economy still has the same flaws, there is only a finite supply of bitcoin so if a bank wants to issue a loan for bitcoin, he may lend bitcoin in exchange for legal tender IOUs promising to pay back the bitcoin loan- banks still have the ability to "create money" this way Espically if bitcoin IOUs can be used as collateral to issue even more bitcoins in exchange for even more IOUs: banking services will still be responsible for managing the economies debt. For this reason, I believe as long as we have sovereign countries managing their own individual countries debt based economies, Bitcoin won't replace fiat.

The true value of bitcoin and cryptos are in the money remittance market. The current state of money remittance has barely evolved from keeping transaction record papers in filing cabinets: the records may be digitalised but they are still separate documents from the money itself. A bitcoin itself is both a currency and a permanent record of everyone who has is used it, its inarguably superior and I believe, cryptos like bitcoin are guaranteed to replace the current model of money. Weather this be bitcoin itself, formation of microecosystems with their own tokens or fiat issued cryptocurrencies (likely will be a combination of all three) . Money remittance is a HUGE MARKET and will grow by leaps and bounds when the unbanked peoples of developing countries tap into the market, projects to that are already under way. For this reason, I think the valuations of crypto's aren't as high as people think, in addition to having use cases, they also attract speculation from all over the world and act as a wealth reserve just like gold does.

TLDR: Bitcoin cannot and won't replace fiat without serious change to the debt based economic model of most first world economies, but that doesn't matter, most speculation isn't by anarchists thinking they don't need fiat (I suspect most of them forked off to bitcoin cash which is trying to do that), it's by people who are trading the speculation or investors who believe and benifit from the peer to peer money remittance economy. Cryptocurrencies are the major selling point of blockchain technology and will emerge as one of its most successful use cases.