>Legal tender is perhaps the most important corner stone of a modern nation state, if an entrepreneur can invent their own money and subsume the one issued by a government then you don't have a government.

Legal-tender laws already prevent non-government currencies from subsuming fiat. Nobody is obliged to accept Bitcoin as payment of a debt, but they are obliged to accept legal tender.

And besides that, there will always be demand for fiat at least for paying taxes.