At first, humans used to trade goods for goods, then they used salt (for example in Roman Empire, soldiers were paid in salt). Then coins were created from gold, silver etc. Now you couldn't carry 2kg of gold with you could you? And that's why the Chinese in the 17th century created what's called Bank notes (basically paper money), which its value was backed by keeping Gold in the reserve.
The money we have today, which most of it is credit and not paper money or cash, came in when sailors from Spain as I remember, ran out of money when they were sailing to find new lands. And the king signed playing cards which then was used by the sailors as money. That's where the value based on trust comes in. The problem today, is that most of the money we the individuals, banks and governments use is credit and not paper money. Credit which is based on trust, we trust the governments and the banks that the value of dollar or any other fiat currency stays what it is today, or goes up in value right? Because if we go to the banks right now, and tell them give me my 10,000$ I have in my account, they will tell me give us 1 week to gather it for you. Why? Because the money that appears in your bank account is credit, it's not real hard cash. And so they need time to get the cash for you.
That's the problem.
I see your point, you need money to make Bitcoin. Dammit, when I was debating I knew I had something up my sleeve but I forgot that point. Next time I will bring it up :D
RE: Are we moving towards Centralized Private Blockchains?