- Bitcoin is mined
- Bitcoin's value is pegged to the "gold standard" of computation
- Only 21 million bitcoins can be mined, just like gold
- Bitcoin transactions are like bank transactions, except that anyone can verify a public ledger
Making the bank's private ledger a public ledger (since transactions are open, once you know the account owner, you know their wealth) is aligned with governments but not aligned with individuals demanding privacy. This could be the future.
The process takes the salaried ledger checkers and transforms them into miners. Miners are sort of non-salaried contractors, like drivers for Uber, who would work on demand (aligned incentive).
Bitcoin is regulated by the market's demand.
Fiat currency used to be pegged to the "gold standard," and now it's regulated by the country's regulators, a selected group of economists and policymakers. In response to one country printing more currency, other countries can choose to print their own currency or not, thus keeping the exchange rates in check. There is a complex network of countries at play here.
If bitcoin were to become the next generation's currency, it needs a similar complex network that can change in response to the market's demands.
Bitcoin would become the next generation's default currency since the next generation would be digitally native. For the next generation, in their mindset, printed currency is no different from virtual currency. To move their currency from one ecosystem to another, they would need to rely on bitcoin, like we rely on gold today.