Forget about Bitcoin and P2P cash, think about places where there are multiple currencies being used. If for whatever regionally dependent reason one currency is more preferred than the other, does that invalidate the other currency as cash money? I don't think so. The world is very complex.
I agree here, and it matches my own experiences in countries where the local currency is competing with the USD as a "harder" currency. However, much depends on the type of money you actually get for your work. If you get the "hard" money directly, you may as well spend it directly if you have the opportunity. Thus, if Bitcoin really begins to circulate, the hesitance to spend it should be lower than in a scenario like now when you've to constantly re-buy BTC. This is of course a chicken and egg problem. And that's why I think if you like the idea of Bitcoin as a global currency, and have the opportunity and see good deals, you should support merchants offering the BTC payment alternative so the circulation can gradually improve.
These examples are not equal though? Bitcoin as an anchor for a new kind of money would not create much transaction activity.
While that wasn't my point here, you're of course correct that Bitcoin only as "backing" currency for some "new kind of fiat" would not generate that much onchain activity. It depends though how this is organized. If it's backed by a trusted entity, like a government or a large corporation (just like stablecoins today) then indeed the blockchain footprint should be minimal, but in a more decentralized backing scenario which is organized more like a second layer, more activity should also be recorded on the base layer.
My point was more the following idea: In the "Bitcoin bull" world, I often see very utopia-ish predictions where Bitcoin one day magically "changes state" from a speculative asset to the "world global currency". This transition would probably not happen that smoothly if current use patterns contininue to prevail (hoard and sell). All major cyclic crashes have been of more than 75% which means there was always
massive profit taking, and the downside volatility decreases much less than upside volatility.
And it's possible that this bumpy ride to the Bitcoin standard will mean that this utopia will never materialize. Just a random scenario: imagine the US buying a large stash of Bitcoins for their strategic reserve and running into a deep bear market just afterwards, followed by a government change which changes the Bitcoin policy again to restrictive, which amplifies the bear market. This would hurt the "strategic reserve" idea much more than El Salvador's meager results in their adoption, and could end the dream of a lot of Bitcoin bulls. It's a scenario with a certain likelihood, considering the current high valuation of Bitcoin.
A smoother transaction would happen if Bitcoin achieves the "world currency" status not by speculation by nation-states and companies, but by P2P cash usage, at least for international payments, larger online purchases and such stuff (not for your day to day coffee). This would boost liquidity and lower volatility in a more natural way. Currently I think the largest impedements to that "alternative utopia" is volatility and lack of hedging methods which preserve the decentralization, followed by the bad usability of L2s. There's progress but still a lot has to be done. But it doesn't hurt to promote the P2P cash idea.
I largely agree with the other points of your post, for example the chicken and egg problem for merchants and the amplification of the characteristics of "hard money" by being censorship resistant. I also agree with the multi-currency idea, I don't think Bitcoin will be the "one and only" world currency. But it could, on a global level, become something like the USD today, an alternative, harder currency, and this is more likely if the P2P cash idea thrives.
Further, we can't use the last cycle for the sake of comparison either as that was a very unusual time. Bitcoin and altcoins were skyrocketing, everyone was home from COVID and people were consuming news all day long.
This is indeed an interesting argument, but as these times are over (and they were already over in 2023/2024 when the intermediate transaction activity high was recorded), I still think if retail interest picks up again (current Google Trends values hint that this is still not the case), and then we're not seeing an increase in on-chain activity (including L2's of course), it may be time for a "not your keys, not your coins" campaign to avoid further centralization.
A point which is a bit less important for the topic but I wanted to ask anyway:
The current situation just shows just how bad fiat currencies have become. Would many people have expected this to happen if you asked them 20, 30, 40 years ago? No way. Everything else is so bad in comparison, that as long as you have any other fiat you are more likely going to use that.
What do you refer to "bad" in relation to fiat here? The inflation wave in 2022/23? Because currently, most money supply charts (e.g. M2) show a contraction or at least stagnation again, which hints that at this moment, fiat is relatively "healthy". I may agree more about the burden of debt in selected countries, but also here, not all have deteriorated, most countries in Europe for example were lowering their public debt in relation to GDP in recent years.