for all of the reasons mentioned in the OP...
prisoners have WAY more incentive to want to use btc than average joe, so we should expect to see them adopting before random people. so saying other people dont use them why would prisoners is a little silly.
Sorry have you ever been in jail? I have and feel you need to know 2 things:
1. Unless you are very lucky and the librarian is exceptionally generous, you will not have Internet access. So buying cigarettes with Bitcoin is not going to happen.
2. If you known to have something worth over £100 in the morning, say a lump or a mobile, by noon you will have made a choice between having teeth in your head and having that goodie taken off you.
If you were going to jail, would you want anyone to know you have a Bitcoin and that all anyone needs to do it poke you in the thigh and they will have it transferred to their wallet? Or would you want someone to get a lump of hash to you?
no i have certainly never been in jail.
1) ok in the video i linked they were clearly using smartphons with 3g or 4g not the librarian. of course you might be right, i already conceded that what we see in the video may be an isolated event.
2) that was one of the advantages i listed for bitcoin. if you are storing wealth in cigarettes, as i understand it the standard prison money, than its apparent to everyone that you have wealth. you never need to tell anyone how much bitcoin you have or if you have any. this is one of the advantages bitcoin has over cigarettes as money.
For the record, I should never have been in jail either. It was a wrong place wrong time thing and never got to trial.
notice my deliberate use of "some prisoners are criminals" anyway sorry to hear that, we have all suffered at the hands of the state, some more than others.