The only difference is that we cannot hold bitcoins physically in our wallet and that is the reason people don't have faith in bitcoins and prefer to use fiat money as they can hold it easily and that makes them to trust fiat more over bitcoins.
Obviously, that is digital currency, it has no physical coin at all. And not all people don't have a faith in bitcoin, they just don't know what is bitcoin and what it holds in the future. Another thing, not all people like to hold their money, especially when you have too much, they keep it in a bank and own an ATM for withdrawing if they needed them. It is like bitcoin if you ask me,but, the bank is yourself and you supervise your own money. There are many difference of bitcoin into fiat, what I love is it's decentralization.
Thats also explain that using bitcoin could give us full control but if we use paper money and we keep it in bank so government can also controls our money. some countries were do limitation to withdrawl money in bank in every month.