All these comments are good and all, but only Chromebooks and Ubuntu have brought forward a instant user friendly experience for users who don't want to Google around to get things working properly by default.
To be a bitcoin believer, its not necessary to think it will displace fiat. Bitcoin is deflationary like gold, so it shouldn't be much different then the gold commodity market or returning to a gold standard. For most of the united States growth and prosperity, it was on the gold standard.
Yes, the big question is whether currency has such a strong network effect that one will dominate. Hayek argued the opposite, and wrote a book claiming that a system of competing private currencies would be ideal.
There are also a few technical arguments in favor of multiple currencies. At the moment we don't know how to scale a single blockchain to major-currency levels, unless we do mostly off-chain transactions. And with appropriate software, accepting lots of currencies doesn't have to be harder for a merchant than accepting one. There's also some work on cross-chain currency trading without a trusted intermediary.
Glad to hear I can just carry one reward card instead of card for every grocery store I visit. Glad to hear Ill be able to use google for person to person payments instead of paypal. Perhaps they will even get the same functionality as the bitinstant card.
As you said, this is only a qualification of 'mature' markets. Also, central banks do not fiddle with interest rates to keep the value stable. They fiddle with interest rates to stimulate economic growth, which causes instability through bust boom cycles...kicking the can down the road.
But there's no reason to believe it won't go down 30% next week. Fluctuations of this magnitude are terrible for something that purports to be a usable currency; more like what you'd expect from penny stocks.
