I didn't say fail as in completely cease to exist. But basically it could tame the money printer to some extent just by being a viable alternative. Basically it could force fiat to self regulate and become sound money. Something a paper/digital money could be, even a centralized one. The incentives just aren't there currently.

Not the likely outcome I see, but one of the possibilities in my mind.

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The way I think you see something like this being likely, is just by carefully evaluating human behavior in social groups. Look at people's political attitudes, their attitude towards states, etc. What you find is, the vast majority of people consider taxation and some semblance of the welfare state either a good thing or necessary evil. Everywhere. There's differences in opinions on how big or small the state should be, and how generous or minimalistic welfare programs should be. But when you add it all up, it turns out, it's a very very small number of people who think the idea of being a fully self-sufficient individual -- responsible managing their own security, contractual relationships privatized public goods, and all the stuff that anarcho-capitalists claim represents a perfect ethical society -- is an attractive idea, and compelling reason to disintegrate the modern state.

Humans organize into hierarchal power structures repeatedly, even when small societies are set up to try and deliberately avoid them. It still happens.

This tells us something important about what to expect from human nature in the future.

It's a big part of why I think political liberalism and democracy are very important -- to mediate the dangers of the human predilection for falling into these patterns into something that stays relatively aligned with the interests of the maximum number of people possible.

And as I've said previously, I think Bitcoin is a wondrously promising tool to add to the mix that puts back pressure on our tendency to fall into these authority structure traps. I don't want to speak for #[5]​, but I think when he's talking about bitcoin as a democratizing force, he's more or less saying the same thing.

Honestly, that's kind of what I was saying as well.