Paper as a currency existed before the Federal Reserve took over, and while very early in the country's (and even predating it) life the fiat (which intrinsically means it is not backed by anything) lost value quickly, in 1900 we moved to a gold standard, which left bills backed by a specific amount of gold.

From what cursory information I have read, the primary reason that failed was a massive amount of debts to Europe...which led directly to the Federal Reserve taking over in World War 1.

Even after the gold standard was restored for a time, it's clear that converting to fiat was the beginning of the end. At one point, every country had switched to fiat during the first World War.

Hilariously, the second time we suspended the gold standard (for foreign exchange) during the first World War (1915-1917) was when we became part of it, and we were the last country to maintain that standard up to that point. Go figure, war helped destroy us and yet we have continued pushing it ever since.

During the Great Depression, trust was lost in the banks and paper currency, so people moved to coins which today are also fiat currencies, and become less valuable as they inflate everything.

One could easily argue, and they'd be right, that letting banks and a non-government entity control the flow of money was an incredible mistake and far exceeded the concept's original purpose and scope.

But when it comes to crypto, it is a halfway point between a backed currency and fiat. It is not backed by anything physically tangible, but instead a trust that there is a limited amount of it that can be mined, as there is gold. Except there are a ton of different cryptocurrencies, and more have popped up over the years.

The limit in cryptocurrency is also artificial at its core, as (in Bitcoin's case) it was set by Satoshi Nakamoto to stop inflation. Functionally this turned out to be silly in a sense, because the value of a single Bitcoin has risen to laughable absurdity from the people who had initially mined them so readily and easily at one point but I digress.

Bitcoin's true viability as a currency won't be until closer to the end date in 2140.

Contrary to popular understanding, the maximum number of Bitcoins can technically be changed in a sort of democratic process which offers an avenue for nefarious powers to devalue the old fork (21M) and rug-pull to a new fork.

I'll always prefer the gold standard, because it is a physical backing that also has physical uses which keeps the value high. It's not just a commodity or luxury, instead it functions as both. Bitcoin, and other digital currencies, are not backed by anything. It has value because it is deemed to have value, rather than having fashionable or practical applications.

There are other vulnerabilities to crypto which is that regulation through legislation could effectively end exchanges (something that Trump has stated here that he intends to stop) and without exchanges means that the currency falls flat as there is no way to exchange it for goods, pay off taxes government theft, etc.

I think crypto is neat, but it's neat as it is now. The only other practical use could be as an international currency standard, but as a national currency gold backed would be better.