I agree with your last part, but not the reasoning, exactly. :) If you started your own currency it would be worthless because of the lack of demand for it. R

I agree with your last part, but not the reasoning, exactly. :) If you started your own currency it would be worthless because of the lack of demand for it. Right now Bitcoin has a market cap of about 800bn USD, which (coincidentally) is about the same value as the CHF M1. (M2 is a little over a trillion USD.) These are crude indicators that there's substantial aggregate demand for both assets. What's interesting is how Bitcoin got to that point. Quite a few years ago, it wasn't worth much at all, and you could only use it to pay people who were ideologically motivated to accept it—your crazy coworker who'd let you pay him back for beers in BTC, for example. Then you add in the people who will use it for practical reasons (they're criminals, they are underbanked, they want payments under the table), the people who will use it for reasons of mass delusion (they think they'll get rich), and suddenly you have substantial aggregate demand—enough that you can reasonably assume a BTC will be worth something in the future (though highly unstable demand still). This seems to be (to my knowledge) an uncharted path to creating a "recognized" currency. But as to your point about fiat: if the US government were nuked, you'd have massive economic disruption for other reasons. But this isn't per se why the USD is valuable (anymore?).