Hi Stephen, thanks for your reply, you obviously also think very deeply on these things.
I like the basic principle behind your idea, but the problem for me is that fiat currencies are just promises to pay, not tied to any particular standard, with no real evidence of wealth. The value of them can be moved, like a carpet under our feet, so not reliable to build on. Fiat looks almost like it was deliberately designed to deceive, when compared with crypto.
In contrast, crypto-currencies cannot be manipulated in the same way; there is always clear evidence of exactly what funds are in existence, and clear methods of proving ownership.
I think all fiat will eventually give way to crypto-currencies one way or another, maybe things will converge to a single crypto-currency some time, but for now it looks like we are heading towards a whole new spectrum of per-community crypto currencies, with no geographic borders.
In fact it is even feasible to have per person crypto currencies, directly representing the data of our valuable human output.
The challenge now is how to implement per country (or even per state) tax outputs, in any crypto-currency.
Wouldn’t it be ironic if governments became funded by voluntarily contributions by individuals? Maybe that is how it should be.