But Bitcoin is hardly the only limited supply cryptocurrency. There are others that have much lower transaction costs and speeds. It would seem to me that they are more usable and demand for them will ultimately be higher. Why use Bitcoin when you could use something exactly like Bitcoin except for lower transaction costs and higher transaction speed?

Yes, you can still trade gold or silver for coffee but it is impractical in most cases. The reason it is impractical has nothing to do with the value of gold and silver (and you would typically use coins, not carry around bars), it has more to do with legal tender laws. I don't know why you are using ridiculous sized gold amounts in you example. 1/10 ounce gold coins were once common and that's more like using a $100 bill than a $500 bill and that is plenty common to use in grocery stores and other places if not just to buy a cup of coffee. This would not be a practical use for Bitcoin as things stand today. This is why comparing bitcoin to gold and another cryptocurrency to silver really isn't a good analogy. It doesn't cost you anything to spend either gold or silver or dollars for that matter. And rarity alone doesn't make something valuable. It helps but the demand has to be there as well and there are plenty of reasons demand may move from Bitcoin to other cryptocurrencies over time. Not saying it will happen, just that it could.

Not sure what your point regarding currency vs. money is. I thought we were talking about the dollar and why a cup of coffee costs $5. The reason is partially inflation. Also, money can increase or decrease in value relative to other things just as currency can. Currency can be 100% backed by gold or silver (and used to be) or be completely fiat. And as for an even easier way to spend gold than 1/10 oz coins, you could deposit it in a bank and write a check for whatever fractional amount you wanted. Or use a card or phone or whatever and do it electronically.