RE: Would The Collapse Of Fiat Help Crypto?
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Totally agree. Crypto is alive because fiat is alive and by now crypto is not an alternative to fiat. All of the exchange listed cryptos are simply assets in my opinion. Very few have the ability of replacing fiat, and to a small extent. For example you can buy coffee or redbull with BTC in some places, but they're too few. 99.9% of the people that bought crypto did that to earn more money by selling higher than they bought in, not to buy groceries with them. Some sort of cryptocurrencies will probably replace fiat, but not bitcoin or any other. I believe governments will develop their own cryptos to be used on a large scale, but the cryptos that we have now, and especially the ones that will survive for that era, will be simple assets, or collectibles of the new internet. That's how I see it. Great post!
Bitcoin's use case is not digital cash although Satoshi may have envisioned it to become a form of cash. Bitcoin's greatest value right now is in its being a non-correlated financial asset. That type of assets are useful in the diversification of a portfolio to gain better yields under bearish market conditions. The other major value proposition of Bitcoin is its hardness as money thanks to the fact that its inflation rate is programmed to halve at four-year intervals and that its monetary policy is extremely difficult to change. Bitcoin could replace corruptible central banks and become the new monetary standard as digital gold particularly if boosted by decentralized or centralized second layer solutions that allow the grouping of payments only to be settled at the blockchain level very sparsely. But that is currently theoretical. Bitcoin's adoption is far from that, yet.
Many people fail to appreciate the fact that blockchains are useful for building trustless distributed ledgers that do not rely on trusting any single third party. The distribution, particularly if the consensus mechanism is Proof-of-Work will always come with a high cost in terms of scalability.
In blockchain, the following is true: scalability, security, decentralization, pick two. You can't have all three at the same time. Centralized payment channels work perfectly fine for most applications.