turvarya,
You do realize that decentralization and the European social model (tax and redistribute) are incongruent?
A decentralized currency(!) and the European social model are not incongruent?
There are not just this two extrems: Either everything is decentralized or everything is centralized.
There is also not just that outcome, that Bitcoin succeed and every fiat disappears or Bitcoin disappears.
If your imagination is just limited to think of 2 possibilities, than I finally understand, what your big problem is.
You realize you didn't answer the second and third question. Are Europeans going to rail against AML laws that aim to prevent tax evasion so they can avoid AML compliance for Bitcoin?
If yes, the tax evaders can just route everything through Bitcoin.
I am glad you are disagreeing with everyone who thinks Bitcoin will be a really big and dominating phenomenon. So your argument is Bitcoin is irrelevant. Okay.
Readers Europeans do tie themselves in logical knots when it comes to their social model. They think they can have that and have some idealistic concepts about "freedom" or rational "decentralization" or some other conflicted psychosis.