What Satoshi Did Not Know (2015) [pdf]
Bitcoin is useful as a trust-less medium of exchange but in the real world, legitimate trade involves some level of trust and enforceability of implicit or explicit contracts. Nobody needs a blockchain for legitimate transactions because there is the accounting ledger which is transparent to the law and whose falsification constitutes an illegal act. For example your bank can not deduct money from your account without cause. You do not need a blockchain for the value stored in your account to be secure because falsification of ledger balances is a crime. You don&#x27;t need to encrypt the account (equivalent to hiding money in an obscure place) because stealing is a crime and if bank robbery or failure happens you have the FDIC to ensure your balance to a certain degree (ask users of Bitfinex circa 2015 or 2016 about this...) Thus Bitcoin is largely a solution in search of a problem unless you are dealing in a black market or trying to hide money from legitimate authorities for some other reason.<p>The dollar is a highly decentralised currency in actual practice. Yes, the federal reserve or treasury can increase or decrease supply of dollars but in practice in recent years the value of a dollar is set by its usability in the real world not the actions of a central authority at the margins. In fact I would venture to say that if the central authorities started to undermine the value of the dollar for global commerce the central authorities would lose their power over the dollar before the dollar lost its value. Many more countries than the USA use dollars. In fact the vast majority of physical dollars, if not dollar balances exist outside of US jurisdiction.<p>The only way that the dollar can and will be dethroned is if some other currency becomes widely used in commerce. That certainly wont be Bitcoin but it could be another digital currency like maybe Ripple. Bitcoin is not very useable in actual commerce. The processing time of transactions is tremendous, and the deflationary and volatile nature of the currency makes it an unsuitable store of value or unit of account. There is no reason to expect in the future bitcoin will stabilise. Its price is set by exchange speculation and a decreasing rate of new coin supply. Unless commerce overtakes exchange speculation as the price setting mechanism for bitcoin it wont be very useable for legitmate commerce.