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It definitely has utility but it is at the same time overhyped IMO. Some examples of utility:

1. Cross-border transfers without needing permission from banks or identification

2. A fungible digital asset you can hoard and nobody can physically take from you if you secure the keys.

3. If you are a business in a gray or black market industry, you can accept payments from customers online without needing permission from payment processors. Many types of businesses are effectively banned by the banking system.

4. It provides a way to obfuscate your wealth which can help protect against asset seizures. Similar to #2.

These are all true but far and away the dominant use case is long term (10+ year) store of value/dollar inflation hedge- which sometimes implies #2, but many entities are happy to hold on exchanges. Total BTC market cap at $2T- would guess from how relatively little transaction activity there is that at least $1.5T is due to this use case.
It isn't fungible at all since every coin has a history which in some cases makes it unspendable, so it is highly risky to accept transfers without a third party chain analysis report, otherwise i agree
Report which you don't get from centralized exchanges. So you have to trust them and they should somehow be liable for the provenance of what they sell to you.

Probably most CEX don't allocate UTXOs upon buying, but only for withdrawals

I am aware of a couple of cases where people received flagged coins from centralised exchanges and had a lot of issues
My favorite response on this: https://news.ycombinator.com/item?id=26238410
It is scarce, novel, transferable, passed critical mass of popularity long ago, uncensorable to some degree for now. That's all that's needed, it makes it better money than perhaps anything else
Its utility is similar to that of cash. But unlike cash it's (1) less fungible (2) much easier to transport (3) harder to secure from theft and/or destruction * (4) value is more volatile than USD/EUR/CAD/AUD (5) incredibly resource intensive to maintain (and growing!).

It's not an equity, it's a currency.

The Bitcoin network is nigh "indestructible" as long as some folks still consider it useful. This delivers credibility towards the faith required to support some value. If its value dropped by 99% tomorrow (maybe from aggressive global legislation and cooperation among governments), it would still function (but perhaps primarily maintained by sanctioned countries).

I think there's significant pros and cons to cryptocurrency in general and Bitcoin specifically. As the emission rate continues to decrease, I suspect its value will stay relatively high relative to what it is now.

EDIT: I said in (3) above that it's harder to secure bitcoin from destruction (than cash) but in some ways it's remarkably more robust than cash. You can make as many copies of the keys securing your bitcoins as you like (and/or use multi-sig). Your home burning down would destroy cash, but if you have a backup your bitcoins are preserved. However this is in tension with "secure from theft".

Perhaps most importantly, unlike cash, it can't be printed, and unlike gold, its supply is not responsive to price.
> it can't be printed

New coins are minted with every block. But perhaps you mean to suggest that it's "stable" or "predictable." The emission rate of bitcoin is predictable - but this is predicated on the stability/predictability of the community of miners/stakers. It seems extremely irrational now, but if something were to change such that the community decided to drastically increase or decrease the block reward, they could indeed do so if they found consensus.

> its supply is not responsive to price.

While this is probably true, the value of mining equipment is directly related to the exchange rate of bitcoin (and perhaps its recent rate of increase/decrease). This doesn't impact supply, but it does impact the network OpEx.

Well, not just predictable but hard capped at 21M, about 19.8M (or ~94%) of which have already been mined. So in some sense, inflation tax can't exceed ~6% over all time.

(I don't think it's a sustainable model, as security essentially decays over time, unless fees become extremely high which doesn't seem like a great outcome either. But that's another matter...)

There are a few answers to the long-term security budget:

1) We could maintain fees through compression, that is, by making each on-chain transaction representative of many off-chain transactions. This is beginning to happen with the lightning network, and other technologies are in the works to advance this concept.

2) Mining will become more integrated with other industrial and residential processes, which will reduce the cost of security, from a compensation standpoint. Think bitcoin miner water and space heaters in many homes, etc.

3) It's also likely that in the future institutions that rely heavily on bitcoin will voluntarily subsidize security to some extent, for the same reason they invest in vaults for other instruments. Personally I'm planning to start running a lottery miner at home just for the fun of it.

(2) is interesting, but I'm not sure if resistance heaters will remain common in the long term, as heat pumps become more widely available?

Also this seems like a sort of free-electricity scenario (mining with electricity that was going to be used anyway), but I'm not sure free electricity would reduce mining costs? Wouldn't hardness adjust so that it then becomes all about hardware CapEx (assuming amortized CapEx remains significant)?

I figure mining costs are around 1% of the market cap, and can't go that much lower without serious security risks. So the ecosystem needs to fund that in some way, whether it's through inflation, fees, or donations.

With fees, I also worry they'll be too unpredictable. Like there might be enough demand to justify $20B/year in fees, but it's a function of supply as well, and if scaling solutions like Lightning Network work "too well" (with people rarely needing to settle on-chain) we might end up with way lower fees.

> Its utility is similar to that of cash.

In the USA, spending cash doesn't require ~30 minutes of validation or a capital gains report.

Transacting bitcoin via the lightning network is instant. Capital gains is a matter of policy and is likely to change at some point as bitcoin succeeds.
Show me an economy that only uses bitcoin and doesn’t depend on cashing out to one fiat currency or another and I’ll allow that it’s a currency.
El Salvador.
Somewhere between tulips and gold.
Both are pretty, though.
There is a lot of utility in bypassing the credit card company cartel which have been abusing their position to create a pseudo government to shut down or kill the value of (maybe to make them easier to buy out?) targeted businesses. Or in some cases impose the christian ideology of the owners upon entire countries, most recently japan.
Ah yes, I remember when BTC was going to supplant Visa/Mastercard... 12 years ago.
Cryptocurrency when not being used for speculation or investment nonsense has already successfully provided a pressure release valve for abuse by the credit card cartels. It still sucks, and isn't very convenient or good for most transactions or safety. But it works!

It would be more ideal to just regulate the credit card companies properly but that appears to be beyond current government bodies.

What is the utility of a baseball trading card or a piece of art sitting in a bank vault?
There’s “utility” in enabling crime and being able to move massive amounts of wealth fairly easily.
There's utility in being able to move both small and large amounts of value fairly easily. Moving value has high utility for criminals and non-criminals alike. There's utility in remittances, in protecting value from unlawful seizure, and protecting value from incompetent bureaucrats hyper-inflating your national currency.
It’s because there isn’t any