A large cryptocurrency like Bitcoin is entirely capable of functioning like gold as a hedge against fiat inflation.
I'm not much of a crypto cultist (which is the latest trend here on HN, to tag anybody that defends crypto with that to shut down conversation), however it's extraordinarily obvious at this point how cryptocurrencies can help you evade inflation in eg USD or evade the debt damage to the US economy. Bitcoin for its part is global and not primarily dependent on the condition of the US economy, and it's likely to become increasingly global and even less dependent on the US over time.
> Don't you still need to pay for goods and services in the same debt-based economy
Of course. This is a case where crypto is even better than gold. It's particularly trivial to convert in and out of traditional fiat.
Surely you understand enough about cryptocurrencies at this point to know how easy that is. And it appears likely to keep getting easier, given the effort companies like Coinbase, Robinhood and Square are putting into it (check out what Square did in its latest quarter courtesy crypto).
> How does the flavor of money change whether someone needs to go into debt?
The parent said debt based economies. The US has an economy and government system that is increasingly drowning in debt (check out the corporate balance sheets in the US; nationally it's horrific; that situation has been spurred on by the Fed's forever low interest rates, which encourages corporations to take on ever greater sums of debt because it's artificially cheap, which will ultimately lead to zombies ala Japan). The Federal answer to that is to print ever increasing sums of fiat USD, because there are no foreign buyers left that can absorb tens of trillions in new US government debt. The Fed unavoidably becomes the primary buyer of the US Government's debt (this is where a nation begins eating itself; that began for the US over a decade ago now as a trickle, that trickle is picking up pace). Once upon a time not so long ago it was a huge deal that China held a trillion dollars of US government debt, now that sum is a joke, a mere portion of one spending program this week or next. That's how quickly the US is imploding fiscally.
How does Bitcoin help you with that if you're stuck in a debt based economy? Well it's very obvious. The Fed will keep printing aggressively to fund the US Government's finances. And the Fed will have to hold interest rates as low as possible forever now, because the US Government can't afford its debt any longer at normal interest rates (3% * $40 trillion = bye bye social security or medicare or the US military). That need by the US to inflate massively, to constantly debase the rapidly expanding monster pile of debt, can be hedged via gold, sometimes via high quality stocks, and possibly via crypto (pick the one/s you think will endure).
And as this all gets worse, the tax hikes have to keep getting worse, which will choke off growth, which accelerates the stagnation and makes everything that much worse. All in all, the average rate of growth in the US economy will keep sinking toward zero.
Given enough time, somewhere between 10 and 20 years depending on how wild the clowns in DC get with spending, they'll have to begin directly debasing the USD to accomplish their goals (they'll promptly educate the public on how it's economically beneficial to devalue their currency), it won't be enough to do it slowly. There's nothing novel about any of this, we already know exactly what the playbook looks like, see: Japan. The US will be able to maneuver a little better than Japan has courtesy of having the global reserve currency (although at the rate they're destroying things, that global reserve position will drop out even faster than it was otherwise going to).
The only way Bitcoin & Co aren't useful given where the US is obviously going at this point, is if the powers that be get so desperate about the context that they outlaw crypto or otherwise make it very impractical (artificially add enormous cost to owning it, via tax or regulation).