bitcoin is the slowest of all cryptocurrencies and many people use alternate cryptocurrencies (colloquially called altcoins) that transfer to exchanges faster than bitcoin (2-10 minutes compared to 10-60 minutes)

so storing more securely in your own altcoin's wallet and transferring is very fast.

most people aren't selling bitcoin for national currencies when they are using an exchange, they are trading between altcoins and other cryptoassets.

In the 5% of the time you actually need a national currency, you deal with those fiat exchanges on the far edge of the cryptocurrency economy, and deal with their slowness and questionable security for a brief amount of time.

Also, although less true now, exchanges can't be relied on to broadcast transactions to pay for things as well as a software wallet does. So when you aren't speculating and trying to buy something in a time sensitive way (such as using bitpay or shapeshift.io), using an exchange as a personal bank account for online shopping results in a horrible user experience.

I'd actually like to know if this is the case. It certainly isn't what I'm doing. I did hold some Litecoin/Peercoin for a while, and I still have Namecoin, but I have enough Namecoin that I'll probably never have to buy one again to keep my .bit domains, and I haven't held anything else except Bitcoin in over a year. So my typical use-case for an exchange is just to exchange national currency for cryptocurrency.

I suspect that I'm not the only one, but I don't have any evidence for that. If you have evidence that my use case is actually the 5% use case as you claim, I'd be interested to see it.

Secondly, my extrapolation came from the daily volume of trade on the exchanges, from what I see on Coinmarket cap and other sources

http://coinmarketcap.com/currencies/bitcoin/#markets

As of time of writing, Ethereum/Bitcoin pair is 20% of bitcoin trade volume. Where Ethereum Classic/Bitcoin pair is another 6.5% of bitcoin trade volume.

Feel free to calculate all of the pairs to see which percent is national currency pairs. This is useful if I was here to defend the "most" assertation, but the point I intended to make stands. Altcoins are fast, more practical to move to exchanges, many people use them.

And finally, 'many people' aren't trading in and out of the currency pairs to acquire goods and services, just for speculation. As such I'll stick to my '5% of the time' statement about when people actually need national currency.

So maybe people who make frequent trades are doing it between cryptocurrencies, which makes sense, because if you're day-trading cryptocurrencies it makes sense to trade for other cryptocurrencies, as that avoids regulation. But we don't have any data about what percentage of users are day-traders. If anything, the fact that Eth/BTC trades are only the percentages they are on that chart indicates that this isn't the case.

And incidentally, people who make frequent trades are the ones least likely to pull their money out of the exchange to somewhere safe, because it's going to be the biggest PITA for them, since they'd have to do it so often.

Maybe decentralized exchanges like Bitsquare can alleviate them soon

If someone had seriously proposed this as a way they use traditional cash + banks, you'd be laughing at them.

I'm not proposing an alternative to cash and banks here, I'm just pointing out that, if you have Bitcoin and want to sell it for fiat currency, using an exchange is definitely the easiest way to do so, and a best practice for doing so is to hold your cryptocurrencies yourself and only move them to the exchange when you're selling them, rather than holding them in the exchange.

I sent ~8 checks at the beginning of the month without doing literally anything, because they were set up with automatic bill payment. When I get paid it goes directly into my account, again without me doing anything. Unless you're going to claim that Bitcoin is easier than literally not even thinking about getting paid or paying my bills, ease of use is not really a selling point for Bitcoin.

There are real reasons to use Bitcoin that aren't provided by traditional banking. We don't need to persuade people it's easier, especially since it's not easier.