What you missing is the fact to realize difference between crypto currencies and fiat currencies. Digital is just expression, fiat is digital long before bitcoin, people use paying cards for decades. Where is the difference? Of course in what kind of principles currency is using for generation, distribution and transactions. Bitcoin is the first crypto-digital-currency build on blockchain technology
That's what most people fail to take into account
But the crypto aspect in cryptocurrencies is just a technical peculiarity, not a defining feature, so depending on your definition of "crypto", fiat money can also by considered "crypto" as cryptography is definitely involved somewhere in the modern fiat too. In this way, the difference between fiat and cryptocurrencies lies elsewhere. If you ask me, the great divide is in who controls the money. With cryptocurrencies, there is no central entity or agency while with fiat it is the government or whoever controls it from behind the scenes (power elites, masons, aliens, etc)