bitcoin and fiat can absolutely co-exist, and they do. unless governments are wiped off the planet completely, they will always use their authority to control the economy through fiat money.
why would they ever give up that power, with or without bitcoin?
FIAT money is our daily currency which has been existing here for hundreds of years, when crypto currencies like Bitcoin is squeezing their way up to become a world currency and sort. Can they co-exist? If so then what benefits we can get from them, altogether? Not separately.
Nope. Well, there indeed were some examples since 11th century, but the era of domination of fiat money came in 1971 when Nixon decided that backing up dollars with gold should go away forever.
you're talking about physically backed money. that's not what fiat money entails. fiat is simply currency that is established as money
by government authority.