For now, I believe cryptocurrencies are mostly used for speculation, most people that buy them expect to sell them back with profit, just like stocks. The value of bitcoin is too volatile right now to be effectively used at a currency. I would not want to hoard bitcoin (or other cryptocurrencies) right now.

At the end of day, a currency is based on trust. If I have a 20$ Cad bill, I know all businesses in Canada will accept it, the Bank of Canada is backing this currency, people can be paid in Canadian dollars, and etc. I also know that I can easily exchange my canadian dollars to Euros, US dollars and etc. Most cryptocurrencies don't have that same level of trust right now. If there is no trust, people won't actively use this currency.

In addition, Currencies are also used by a country/central bank to regulate its economy through monetary policy.

But I can see cryptocurrencies to be an addition to "normal" currencies, but I don't think they will ever replace them.