Newer generation don't really give a damn about how fiat came to be. But they're still using it.

I bet it's the same as bitcoin. Small amount of the newer generation care about the backstory, majority of them will consider bitcoin as an investment or digital currency.

Overall, I think it doesn't matter as long as the protocol works as you said.

Bitcoin has its functionality and as long as it function as it should be, everyone will just keep using it. It serves its purpose.