Digital currency is basically a threat to the old conventional paper money, as the world is heading toward the cashless society then paper money will surely feels its effect.
Indeed, the bitcoin has a good future because its digital with the paper money this is most likely the opposite it has a bad future because everything is gonna be digital.
I think the paper money will soon or later disappear.
I doubt that paper money will disappear anytime soon, there are too many people that would be in opposition of taking paper money out of the economy. There is a good feeling when you have cash in your hand as well, so I wouldn't want to see paper money phased out either.
Paper money will never go away. Just look at how much people are tied to do all their payments with paper/cash money.
In well developed countries there is no real need anymore for paper money as we do nearly all our payments via the internet, but that doesn't mean that paper money at some point will go away.