A Bitcoin can be exchanged in real time for goods or services the same way a dollar on a credit card can only cheaper, more securely and more privately.
The real question is: If you don't like Bitcoin, what is a better system? Is it better to have a currency completely controlled by the private Federal Reserve? Is it better to have the government control it by tying it to gold at some ratio which they can change at a moment's notice?
All money is nothing more than a mutual agreement. Whether it is gold, tulips, gold backed paper, fiat paper, Bitcoin, Pesos, sea shells, etc.. it doesn't matter. What is important to look at are the specific mechanisms of the various currencies. The design of Bitcoin is brilliant. It can only be "managed" by the market. It is exempt from centralized manipulation.
The same aspects of USD that you claim are positive (regulation by the US treasury) are also it's vulnerability.
You claim that the USD has a predictable, stable value. So tell me, how much gold will a dollar buy in 10 years? How much .22 ammo will it buy? How much gas will it buy?
I am not able to tell you how much a Bitcoin will purchase in ten years but I can tell you what factors will determine the value. The market. Nothing else. Can you tell me what factors will determine the value of a dollar in ten years?
I know that a dollar next year will be worth 1.02 to 1.04, depending upon inflation. I know that in ten years it will be around 1.38-1.40. I know that because the factors of inflation are mitigated by the large number of people using the dollar and their confidence to use it for decades. People buy dollars with their labor and produced goods because they have confidence in a consistent value over time.
I can never know that with a bitcoin because it trades as a speculative commodity, one with no intrinsic value at that. A bitcoin I use to buy a book today may be worth enough to buy a dozen books by the end of the week or not even enough to buy a stick of gum.
The factor that affects the price of a bitcoin is simple. Gambling mania. People buy Bitcoins because they gamble lots of people will try to buy Bitcoins and the value will keep going up because of demand. But like every Ponzi scheme, there comes a time when you run out of gamblers. The number of fools is limited and the bubble bursts.
There is zero consistency of value. It is not money or currency.
Back to reliable medium of exchange and reliable stored value - central point, people use dollars because a dollar will provide equal return of value over time. People buy Bitcoins because they hope it's value will increase. You don't buy pizzas with Pepsi stock or pork futures. That point has to be driven in because it is the fallacy of Bitcoins. I can put ten dollars in my wallet and buy a pizza today or two years from now. Stored value. I can put ten dollars in a bank and know that there are guarantees that it will remain there. Ten bitcoins may buy a used a car today or in two years, a new car or a small soda. Nobody can predict the value. Bitcoins fluctuate by the hour. A bitcoin payment of $100 value may increase to 500 or fall to 20 just in the time it takes to fill an order. Retailer and customer lose. Moreover as recent events show, I can't save my Bitcoins with much confidence that they will be there next year and I have no guarantees or protections.
Bitcoins do no provide a reliable medium of exchange if the value oscillates drastically during exchange.
Bitcoin is speculation. Its oscillations of value deny consistent value and prevent reliable exchange.
It is a tech stock in a company that pays no dividends, has no product, and no assets. If I asked you to invest in a company that makes nothing, has no offices or staff or equipment, has no source of income other than other investors, would you invest? Would you invest if I just showed you that the stock went from two dollars to one hundred in a week and was predicted to hit one thousand in a month? Many do. And they lose their real money.
If bitcoin wants to be a real currency, then its creators and supporters need to learn what real money is.