One is force (as in there being a threat if you dont comply) to hold a devaluing currency (devaluing due to the loss of trust that made the threat necessary) the other is having to use something as an transfer medium because you need any.

It might boil down to the same in the big picture (people having to use it) but people react differently in the two described situations. One is somebody trying to tax you through inflation, one is using something that is tiresome to use. You will be a lot more motivated to find an alternative for the former then the later.

To the other point, bitcoin being exchanged into other currencies is caused in the expectation of what will in the future be exchangeable for goods and services. IE Adaption. At the end of the day its the transfer of credit. Me paying the supermarket in fiat doesnt speak for an intrinsic value in the pieces of paper, but the expectation, that i worked for those tokens in the past or promised to work for them in the future. Thats all currencies are, what we use is determined by force (government pressure), ease of use and adaption.

I hope we are not talking in circles here, i am trying to get across that its important to look at what actually drives peoples behavior.

1) Inflation is inflation expectation, which just means a loss of trust. You expect to get less for it in the future and if everyone does, it happens.

1a) No individual wants to hold their savings in devaluing stores of value. There is a fear of value loss that drives behavior and Greshams law sets in

1b) Nobody wants to produce for a loss. If you pay more then you can expect to get, you might not do it if you are not allowed to raise prices.

1c) Forcing people to accept it (ie price dictates) doesnt really work, see 1b.

2) You need some transfer medium. Our economy works by me having worked or having promised to work for what i buy in the supermarket. Just because one currencies is buged or exploited doesnt mean i no longer have to buy stuff. Adaption is then driven by market chains. I pay the supermarket in those tokens they pay their suppliers who they in turn can exchange for what they need. Those tokens are generally the ones the government wants for taxes and forces people to use, but if governments fuck up to badly, people still have to eat. Same story over and over again.

Currencies are a con game. They are the best thing we have to keep tab of who gets what in what we produce daily. If it gets exploited (me promising to work in the future every day in the supermarket while never doing it), people tend to realize that sooner or later. If you cant cut off the individual doing it the currency gets devalued over time which triggers psychological effects. Modern monetary theory is the assumption that while you cant force people to use it, it wont devalue if people have no other store of value to flee into. I think thats very optimistic if you look at stock prices (another store of value with even less practicality for daily exchange).

At the end of the day, all crypto needs to be is something any market chain can fall back on once the current one is broken so baldy that the chain halts. (Producers stopping to produce)

Governments trying to ban exchanges falls into the same category as dictating that a farmer has to accept fiat for his stuff. If its not profitable, the farmer will stop and i will still have to eat. Adoption of literally any other functioning store of value then gets forced Which leads us to the second theory behind modern monetary theory. That we are technologically far enough to prevent off book transactions. Which would however still trigger the dont produce for a loss part.

In short, printing money wont work forever, as it only works as long as people believe it to. That sets a mechanism in motion that requires another means of exchange. Who ever has something working will get the job to keep the economy running. All crypto have to be is less bad then trust people have in the governments ability to manage the currency.