I'm going to come at this bass-ackwards and say that Bitcoin sucks as a currency. It's too cumbersome, too slow and FAR too volatile. It's an investment, not a real medium of exchange.
From where I am sitting, the greatest challenge free market cryptos face is their volatility, which is keeping them from being useful and easy to adopt as the medium of exchange for buying things from my web site.
A super minor example: I was thrilled to be one of the earliest users of Steemit's @steembay initiative... but what happened? Between the time of my putting something up for sale (in SBD) and the auction ending, the VALUE of my item went from a tad over $3 to $33. From a commercial standpoint, that's not workable in the real world.
The thing about gov-coins is that they have the potential to offer that stability. And that is a threat to cryptos as they exist today.
My thoughts as well. So, what happens to the current cryptos when govcoins enter the fold?
I think many that promise widespread adoption as an actual currency will fall to the wayside, as their market is taken over by the govcoins. Some will be kept alive by speculative investors, as well as principled investors that choose decentralized coins.
I'm sorry, I'm not a financial expert just a regular person but I have to ask, "stability" in relationship to what? because last time I checked the USD is only an illusion, is like the story of the frogs being cooked slowly, let me illustrate, EVERYTHING! from rent, food, education, medicine,..etc. keeps going up in price, how is that not volatile? slow motion perhaps, but nevertheless volatile, I think people who have no chance of survival in the old model, will rather take a chance on the new.
Every new invention is a volatile investment in the beginning until it reaches a price correction, isn't that how it works? like I said I'm only sharing the view from the bottom of the pyramid
Unfortunately, in today's market environment, I think price stability for cryptos would be double-edged sword. It would give them more legitimacy as a future currency that would guarantee price stability. However, at this point in time, the majority of the money that moves into cryptos is investment money looking for a high return on a speculative investment. If that chance of high returns (that we have seen come to fruition thus far) were to disappear, many investors would move on to the next asset or crypto that is still has high volatility.