On your first point, yes I agree that we must be careful when comparing price vs value. Value is subjective and different for every consumer. Price however, is explicit and determined by the seller.
ah here it is. what I came here to say. Its not longer subjective, we now have a objective stable value metric-Ideal Money. It is comparable to an optimally selected basket of commodity prices.
In terms of fiat improving, we must understand that there are many different streams of fiat money in the world. Some may improve, most I think will not.
Yes I make the point that they CAN adjust. and so there is a survival of the fittest game we will see. I would suggest, as my opinion, that all fiat will adjust and increase in quality or at least rather I don't believe "hyperbitcoinization" that we will wake up one day and all fiat will cease to be used (perhaps "eventually) but through evolution over time).
It seems in this day and age, with the negative interest rates we are seeing, central banks are losing their ability to manage the money supply in ways they did so previously.
Yes and i think they could do worse if we didn't have an option, but now with the option I think they will be forced to provide better fiat. Their new goal will need to be to print money that is stable in relation to what WOULD BE Ideal Money, and to do this they will use the market valuation as their barometer. Fiats that fail will go down in respective prices.
I no longer pay much attention to fiat currenies outside of the effect they will have on bitcoin and other digital currencies.
It depends what problem we are trying to solve. If we want the "best" money and we define the characteristics of it then I can understand, but society is trying to decide the optimal distribution of commodities and for this we would like to have a stable metric for value. For this money COULD evolve to provide it, but there is nothing to suggest that it can be designed to do so ( I think rather it has been shown through strong argument it cannot).
But if our fiats begin to tend towards strength in the nashian sense (ie against an ideal currency) then I think it could be said that our global currency systems are finally "tuned" to solve this problem of needing a stable metric of value.
creating the best money doesn't solve a useful problem in this sense, rather money could be used to solve a very special problem, scaling and idealizing bitcoin doesn't address this problem.