It is a currency. You can trade it for goods or services. The idea of moving it into a national currency is what we do now because we are in the early stages. I see a future where you just pay in coin.
It's a currency that can't buy much of anything, so it's close to useless as far as paying for the needs of a typical person. You can speculate about the future of crpyotcurrencies all you like, but the future you imagine is not inevitable and certainly not the reality of today or the foreseeable future.
Beyond that, if we're speculating, a world where all transactions live on a blockchain is an ideal one for a government bent on tyrannical control of the economy. It is likely that governments of the future will have advanced methods of associating wallet activity with real-life activity, especially for citizens who intend to interact with the larger law-abiding economy (if you ask me, blockchain money is the ideal currency for a tyrant). Of course, you can just continue to speculate about future crpytocurrencies that will solve all these issues and that is the reason why this type of speculation gets us nowhere.
And when faced with competition from legitimized currencies, that somewhere is black market goods and services.
Eventually, someone asks the question, "Why can I buy weed with Bitcoin, but not pizza and chips?" And delivery of munchies is a legit business that can be advertised. Once recognized as a viable model, it can then be poached by major corporate players as part of a local pilot program, which can then be rolled out to larger jurisdictions.
The problem, as usual, isn't that you can't buy anything with it--it's that you can't buy everything with it. As long as you can't pay your electric bill with cryptocoins, the business that accepts one as payment can't also pay its employees with that same cryptocoin.
Honestly, would you even apply to a job posting if it said salary to be paid exclusively in Floopcoins?
Keep in mind that usage of "legitimized" currencies is being actively constrained, there are limits on cash transactions, they are/can be easily seized.. every time this happens crypto looks better in comaprison.
And in Europe one already can pay electric bill and pizza with crypto. While only few utilities already accept them directly, many more enterprises want to establish themselves on this emerging market by mediating these transactions.
So the only option is to arrange an in-person meetup with a random stranger from the internet so that they can gouge me with a gigantic markup or just rob me. This sounds terrible even if I have no beef with the government, but totally absurd if I am actually trying to hide money from authorities; for all I know, the person I meet up with is a federal agent or works with them.
I think you are trying to hard to make it seem infeasible or not worth it. The not-worth-it part may be true for most people but it is definitely feasible, especially with decentralized exchanges and websites that let you get gift cards with crypto or even dash which has a debit card. As long as you aren't in jail of course ;)
It's possible to create a self-executing contract on Ethereum that will automatically send a pre-agreed amount of ether when you make a pre-agreed online bank transfer. In other words, it's possible to have exchange between fiat currencies and cryptocurrency without any need for trust, except in relation to whatever risk there is for each counter-party to report the other for participating in that particular transaction.
You would use trusted hardware like Intel SGX to provide proof of untampered processing of a set of data. Town Crier already has a proof of concept on the Ethereum blockchain. This allows one to prove to a smart contract that a webpage served by a particular PKI certificate holder contains some set of data.