[CryptoFascist]

I keep seeing the fallacy that all currency value is based on future expectations.

Here's a thought experiment... in the US, work full time while getting paid in Bitcoin. Make all transactions in Bitcoin. At the end of the year you'll need to file a tax return. Your final options are: 1. Buy some USD to pay your taxes. 2. Go to jail.

Demand for fiat currencies is ultimately underpinned by them being the only instrument accepted for payment of taxes.

[portent]

Here you describe a good reason why people need USD - indeed another currency or asset class cannot be used to pay US taxes. But its not clear to me why this means valuing currencies on future expectations is a fallacy? It just means that US taxpayers will need US dollars at tax payment time.

[nostrademons]

You have a third option: 3. Don't pay taxes. Live like an outlaw. Shoot the tax collector.

You're driving at an important point that I want to take a bit further. Ultimately, the "backing" of a fiat currency comes from the barrel of a gun. People continue to use U.S. dollars because the U.S. has the strongest military on earth right now. Same throughout history - the backing of the British pound came from the British Navy, and when the British military collapsed post-WW2, the pound sterling didn't last much longer.

A major adoption driver for cryptocurrencies has been the weakness of central governments. We've seen this most with China, where wealthy Chinese businessmen are eager to take money out of the country in any way possible. But the most likely tipping point that would drive widespread adoption of cryptocurrencies would be if the perception became widespread that the U.S. government could no longer guarantee physical security; if, for example, we "lost" the war on terrorism. You could easily imagine people "hiring" personal drones or robots for protection with BitCoin if this came to pass, to fill the vacuum of the state security apparatus.

[Pulcinella]

If the US and other national governments collapsed then every cryptocurrency would become worthless (Gas Town isn't going to accept your "money") or less than worthless (Thunderdome is going to eliminate you because your mining rig wastes valuable electricity).

[nostrademons]

Maybe. My bet is that economic activity wouldn't cease in the absence of nation-states, but rather some other institution(s) would arise that currently perform the function of nation-states: physical security, dispute resolution, identity symbolism, monetary authority, etc. Cryptocurrencies have the advantage of already existing here, but there's certainly the possibility that it could be some yet-to-be-invented institution.