Money is essentially an IOU from society, and you can collect your owed debt from anyone who accepts that money for goods and services. Bitcoin fits into that world very successfully, there are plenty of people who will accept Bitcoin for payment, whether directly into goods and services, or into another asset (like dollars) that can be widely used for goods and services.
Bitcoin is not good for lending, that's true. But it is good at plenty of other things, and Bitcoin will find a strong place in our economy despite its inability to facilitate lending and credit. In a similar token, cars cannot drive everywhere that horses can walk. And yet they have replaced the horse for most of the original mainstream uses of horses.
There are plenty of solutions to the custodial problem, and most of them reduce to situations that are much better than the bank. For example, you can have multi-sig ownership of your wallet shared by your bank. But, your bank's key is only valid after 4 weeks. If you lose your key, that money is locked up for a few weeks, but after that the bank can help you out. In the meantime, the bank doesn't control your money at all. That's just one example of one approach to custodianship that can't exist outside of cryptocurrency. There are many, many are very creative, and almost certainly most of them are better than what you can get with fiat money.
There's also the fact that bitcoin has no central monetary policy. Even if it does reduce to just people putting their money in banks and earning interest, they still end up in a situation where there's no central power controlling the monetary supply, the interest rate, or any other sort of policy related to the currency, and that is an upgrade (or at the very least, it's novel) over what traditional banking can do.
> Finally, there is no mechanism (either before or after this rebirth of fractional reserve banking) that would anyhow stabilize the value of one bitcoin. I do sometimes read very handvawy opinions that when bitcoin gains traction it somehow naturally stabilizes in value. But that is only wishful thinking, nothing more.
I don't think you've offered any constructive support for your argument. Bitcoin flails around because people suspect it can become the next reserve currency of the world, and because little bumps here and there have huge impacts on whether or not that may actually happen. At some point we'll know where exactly Bitcoin fits into the economy, and much of the speculation will melt away. That will substantially improve Bitcoin's velocity-to-price ratio, which should smooth out most of the volatility.
> How delusional you need to be to think that bitcoin is anyhow good "store of value"? I mean, to me, if I want to put my wealth for whatever reason to something that is called "store of value" the one single most important criteria to judge the stores of value would be how well the thing actually stores value. And a highly volatile gambling token is a really bad store of value.
No, bitcoin is a store of value that isn't dependent on any central body. No change in president, no declaration of war, no collapse of a country can disrupt bitcoin's function. While it's short term volatility is very high relative to traditional stores of value, it's resistance to chaotic global events makes it a very good hedge against global disaster. The amount of infrastructure required to run a successful bitcoin is incredibly minimal compared to something like the US banking system. A lot of people don't appreciate how carefully Bitcoin has been designed to resist major disasters, and how effectively it'd be able to pull that off.