For a currency to take off, there must be a large market that requires you to use the currency (such as paying taxes to the IRS). This creates a base market whi

For a currency to take off, there must be a large market that requires you to use the currency (such as paying taxes to the IRS). This creates a base market which can be used as a springboard for wider adoption. BitCoin managed to take off because, IMHO, the novelty of the "cryptocurrency" and some of the problems it solved. For a fiat currency to work, there must be faith in the currency and the governing bodies that support it. The US dollar used to be tied to the price of gold and silver, then later entirely to gold, then it was turned fiat in the Nixon years.[1] BitCoin, in particular, does not allow a central bank to "print" currency (which is a tool used to control the inflation rate). Without the ability for a central bank to regulate the creation of a fiat currency, there would eventually be an erosion of faith in the currency. Alternatively, a digital currency could be tied to a gold silver / other commodity standard, but then it's not much different than any other commodity. The Canadian bank is experimenting with a digital currency, but it won't replace the paper+coin currency, only augment it.[2] [1] https://en.wikipedia.org/wiki/Nixon_Shock https://en.wikipedia.org/wiki/Nixon_Shock [2] http://business.financialpost.com/2013/09/19/canadian-mint-pushes-ahead-in-murky-world-of-crypto-currency-with-mintchip-project/ http://business.financialpost.com/2013/09/19/canadian-mint-p...