To me, the nicest aspect of Bitcoin is its potential use as a long term store of wealth. Even if you convert it back to USD and paid capital gains, (to stay all legal and all ;-) you come out ahead of being in the USD over the long term (my opinion). There is significant risk in my mind that Bitcoin could fail so it evens out more or less but I also like the libertarian part so that is why I am here. I think that if Bitcoin remains stable, those who have invested (mainly non-miners or miners with a strong idea for how much they should be compensated) will have enough incentive to keep it alive with a reasonable price for a long time. In other words, there is too much price "stickiness" developing from previous investors that will make wild drops less likely over time.
All that said, it would not be prudent for one to convert all of their wealth into any one investment with such risk. I consider diversifying with gold, silver, food, select foreign currencies, land, misc assets, etc. This is not investment advice. blah blah
The advantage of using Bitcoins as a Payment method for day to day transactions seems more speculative to me. Given the Store of Wealth concept, an alternative to Bitcoin Payment is for users to periodically convert BTC to USD from a BTC Store of Wealth. This would be more convenient for the foreseeable future because USD will still be needed for daily expenses like fast food. Come to think of it, if you are diversified, you would probably have enough USD to handle daily expenses in cash and so I can see why hoarders may never intend to spend their BTC. The low transaction fee is nice, but talk to me when Amazon takes Bitcoin directly. (Note to self: ask Amazon to take Bitcoin.)
Furthermore, a potential downside to Payment is that authorities may perceive this as an attempt to dodge sales tax. That may not be the kind of attention Store of Wealth hoarders are looking for. So, maybe hoarders avoid Payment and instead just try to quietly convert in and out on the exchanges and hope the authorities do not shut down them down. (And if that happened, look for a lot of hoarders begging for more Payment options!
An interesting question is whether Bitcoin can survive in the long term if the dominant use of Bitcoin is hoarding? I am a Newbie, so don't listen to me, but I tend to think so as long as a viable exchange method remains available. If the exchanges are shutdown, it is hard to see past that.