I do not think fiat is necessary for the world to keep economic stabilisation, However Fiat money is currency that a government has declared to be legal tender, but it is not backed by a physical commodity. The value of fiat money is derived from the relationship between supply and demand rather than the value of the material from which the money is made so i think they can not deceive people any more so sooner or later it is going to be collapse.
I think if Bitcoin is never found, but someone like Paypal has implemented blockchain technology first, then we will not be in the competitive scenario we are facing now.
Fiat currencies are obviously not needed, there is an increasing trend towards currency digitization, and the blockchain-based currency is just the next generation of this. The problem is that Bitcoin comes out, and everyone treats it as a substitute for fiat currency, rather than a gradual increase in digital currencies like Paypal and Skrill.