Hyperinflation makes people use their paper money as wallpaper, kindling, toilet paper... why wouldn't bitcoin take over in such a scenario?
Because Bitcoin isn't backed by anything other than it's rate of convertability into fiat currencies.
If I could reliably convert Bitcoin into X ounces of precious metal, X gallons of Oil or X units of electrical energy, then we might be talking. Even if some government that I needed to pay taxes to required payment in Bitcoin, then Bitcoin might have a case as a 'pretender to the throne'. But as things stand, Bitcoin is nothing. It is a means of quickly transferring wealth around that works to the extent of liquidity in the market. Because the liquidity is provided almost entirely by speculators, the rate of conversion is prone to being highly volatile, thus rendering Bitcoin totally inappropriate for being used as a reliable unit of exchange.
We had this argument. Many, many times just in the few months I have been here. Go reread some of the old threads.