What's all the buzz about BitCoin?

Of course that a 30x return in roughly 4 years always catches the eye. However, after doing some cursory analysis of the U.S.'s Bureau of Economic Analysis data (found here - https://apps.bea.gov/iTable/itable.cfm?reqid=52&step=1), it seems pretty clear that Bitcoin (or any crypto, for that matter), has a loooooong way to go before replacing the dollar as the currency in the U.S., let alone in the global markets.

Why do I say this? Well, the volume of economic activity in a society is given by how people organize themselves. Industry clusters develop around innovative research institutions, geographic features shape how people conduct their daily lives and the occupations they choose. Real economic activity is analog. It does not depend on bits and bytes. However, the velocity of commerce can indeed increase (I think) by expanding the monetary base to include crypto assets.

There are several issues I see with Bitcoin (and almost all crypto currencies):

• They are very hard to carry around and pay with and have no safeguards protecting the user from sudden loss. In contrast, the U.S. banking sector has the FDIC, which insures up to $250,000 of depository assets people have in their bank account. With Bitcoin, you forget your keys and you are toast. No one can help you.
• Bitcoin is not tied to any kind of economic activity (other than mining). This decouples the trust people have in the economic system - which is governed by people they vote for (despite it's current fragile state). The value of a currency is supported by the trust people have in their society. If people don't have confidence in the merchant they paid with (bitcoin who can stiff them and leave the country) and if the value of the coin cannot be predicted, then people will hesitate to enter into economic transactions with others using Bitcoin as a medium of exchange.

Many people say the Fed is corrupt and that printing money is fake, etc. However, the Fed prints money when the government needs it and uses the FOMC to trade Treasury bonds. These are fundamental mechanisms that tie together politics, economy and society. Naturally, if the government issues bonds for wasteful spending, you will end up in a situation of low real economic activity and an expanding monetary which will drive inflation. If people assume all spending is wasteful, then basically what they are saying is that their society broke down; that the government is irrelevant. If you believe this, then, Bitcoin is a solid way to not lose everything.

I believe the U.S. is still a solid economy, with strong institutions. If were were discussing Venezuela, then, yes, Bitcoin is a logical refuge to flee to. Thus, I still cannot understand the fundamentals behind Bitcoin ballooning relative to the dollar. I can see how speculators are making a fortune, but I am trying to identify fundamental shifts in how people use the crypto currency that merit this increase. Have you?