Quote from: polunna on September 06, 2014, 10:46:31 AM

There is no possibility of bitcoin totally replacing all fiat currency. We must keep in mind that there is limit on maximum number of bitcoin that can exist. Most part of product vendors and services providers may shift to bitcoin as it will save them lot of transaction fee.

Limited supply is not a problem when you have near unlimited divisibility.

21 million doesn't sound like much, until you realize that the deflationary aspect of it will practically assure that it can fulfill the needs of the populace. If bitcoin theoretically continues to deflate, it will one day reach parity with the entire market cap of the dollar supply. That will be more than enough money for the planet. The divisibilty aspect further assures that usage of bitcoins (as well as its deflationary aspect) will not become cumbersome.

Fiat currencies continued existence relies on it being a suitable usecase to hold your assets in. Right now, faith in bitcoin is not yet strong enough to warrant this kind of reliance. But if it continues to survive, soon people will start paying more attention to the deflationary aspect than to the inherent risk of the system collapsing. Once people believe that the risk of bitcoin collapsing has the same risks as the internet collapsing, the usecase for fiat currencies to hold your assets in ceases to exist entirely.

The reason people cannot see fiat currency dissappearing, is because they see it in terms of how the general populace sees it. This is the wrong way to reason. The general populace is the last to see change coming and they will be the last to make the switch. You must look at it from the perspective of a whale and how whales affect change and markets.