It's a currency and used as a direct form of acceptable payment. Not as much as it's creator envisioned, but it is. It's not a security. It certainly shares attributes with a commodity although I think a characteristic of a commodity is that it is tangible.
That's nonsense. Bitcoin is absolutely a currency.
Is gold a security or a currency?
But it also has been extremely volatile over the lifetime. And quite volatile at all points.
Not sure what point you are making? It's still deflationary. Yes, it's volatile. Could be worse, could be better. No idea what it will do in the future as the race to zero continues with major currencies.