I guess it comes down to how small of an economy is big enough. At my last job I ran across a situation where my company paid google for compute, and also they paid us for use of our product. So that's a 2-cycle, and if the amounts were the same we could in theory cut the payment gateways out of the loop and instead pay each other in crypto. But at that point, why pay each other at all?
And then there's the other extreme where everybody uses crypto instead of fiat. We have the status quo as evidence that that works to at least some degree. I don't know how many cycles you'll find in the fiat economy, bit its a large number.
For some middle ground situation to work, you don't need everybody to consume exactly as much digital services as they produce, but you need some kind of balance: something like for everyone who consumes twice as much as average somebody else consumes half as much as average. Then you could have this digital-services-only sub-economy.
The more asymmetry you have, the closer you are to having a single producer and millions of consumers, the more quickly you're going to need exchanges involved to restore balance. Else the tech workers run out of fiat to spent on groceries and the grocers run out of crypto to spend on their VPNs and... bored apes gifs?
We can get there by:
1. making the tech easy to use and hope it happens on its own.
2. create artificial demand for digital services via artificial scarcity schemes (this is why modern crypto looks like a casino: tokens as assets).
3. solve a larger share of real problems in ways that make sense to solve digitally (efforts like these are where you get utility tokens from).
More of 1 couldn't hurt. I think we've seen enough of the road that 2 is paving to not want anymore of it. But I think 3 is the bottleneck.
We're in agreement that things could be improved through grassroots change that involves using different payment protocols. But progress in that direction is stalled not because the payments system is hard to use, but because the products themselves aren't diverse enough to sustain their own sub-economy.
