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There is no way in which Dollars are a fiat currency that bitcoin is not a fiat currency.

Bitcoin has most of the features of a central bank in that it regulates the amount of money in circulation and has policy limits on who can create money and how. Unfortunately it's policies are fixed at birth and cannot be changed without unanimous consent of those participating in it's accounting system ( unanimous consent being a synonym for nearly impossible ) and the enforcement is done by protocol and public accounting; rather than by the fact that your local "insurance company with an army" will accept it as a valid form of payment.

Supermajority is sufficient for changes, and it's worryingly easy to get that level of support with the enormous mining pools.

If the US government said that it was creating a new currency and USD were no longer the official currency, what would happen to the USD?

And to be fair to the USD, Bitcoins regulations are laughable simplistic compared to a "real" currency, especially since it is so heavily biased towards deflation.

I do not mean to say that Bitcoin is unsound or poorly designed, just saying that the intrinsic tools available cannot compare given the scope of the initial creation.

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