Internet technology has a history of dramatically reducing capital costs associated with certain activities and enterprises, which brings wide availability to the people.

For example, today anyone can publish a book, create a video channel, set up a website, blog, online store, or get a project funded without all the overhead of inventing and maintaining these complex systems.

As the technology spreads and becomes available to anyone, the old organizations which used to be the biggest and most efficient can no longer compete because their core infastructure has become commoditiezed. For example, the music industry's distribution ability and production studios are slowly becoming commodities. Newspapers and broadcast television is no longer the only source for news.

Bitcoin is doing this to the banking industry. The system of trust, bank transfer protocols, and exchanges are becoming commodities. All that overhead isn't fundamentally needed anymore.

But I don't believe bitcoin will replace the current system as a singular competitor, because that's never what happens when entire industries become commodities.

What will happen is that anyone will be able to start a crypto currency just like anyone can now start a youtube channel - the difference being we're talking about governments and corporations rather than individual people.

All that is required is that payment for employees and raw materials be paid for in one's currency, and one accepts one's currency in exchange for whatever goods are produced.

For example, we could have usacoin in which the US government requires taxes to be paid in it, and it uses it to pay for government employees and other expenses. There could be cokecoin which Coca Cola uses to pay it's employees and expenses, and which it accepts for Coke products. There could be amazoncoin, fordcoin....

FIRST of all, the USA already requires payroll tax deposits to be done by electronic transfer.  Ergo, "e currency" their way their style.  All and any new currencies COMPETE.