I also don't know enough about the free banking period. The consensus view most economists seem to have is that it was a chaotic time: #998456. But Selgin seems to have a different view. Maybe free banking was chaotic in America and stable in Scotland. This is a topic I really should read up more on.

No, he's wrong here. The friction here is that you have to trust the intermediaries. And because these large intermediaries operate on trust, they also require government regulation to keep them honest. Bitcoin circumvents that entire layer of friction.

This doesn't entirely make sense to me. If you're not spending $100 worth of Bitcoin because you expect it to appreciate to $150 next year, then why would you be willing to spend $100 worth of cash which you could instead use to buy Bitcoin? I guess some people do succumb to this irrational psychology, but I think it's more likely that people don't spend bitcoin because there aren't that many places to spend it on, and businesses don't adopt bitcoin because there are too many frictions (taxes, point-of-sale tech, etc)