Ok, here's the thing: I said this above ("you could use BTC to buy good drugs on the dark web") and it sounds sarcastic but I swear to you it's not. Many of the early theorists of cryptocurrency were politically radical libertarians and extremists (with various ideologies -- agorism, anarcho-capitalism, etc etc). And they'd given this issue a lot of thought. A general consensus among them was that a viable digital currency needed a way to enable something that people wanted to do that they couldn't accomplish with existing monetary systems or technologies. So what can we offer that existing money can't?

Answers included: untaxable transactions. Secret, anonymous transactions. Global, cross-border transactions free of fees. Information marketplaces for secrets, pirated data, cracked software. Black markets for drugs, firearms, and other contraband. And finally, a safe haven from a widely predicted coming financial collapse.

So BTC, when it arrived (in the middle of a global financial collapse!) ended with a patchwork of value propositions: first, it's technically cool and interesting to play with. A lot of early BTC stuff was people using it for the sake of using it -- like getting Doom to play on your graphing calculator -- b/c it was challenging and fun. But other people adopted it b/c it fit with their politics: it was alternative to central bank currencies, it would gain value as the dollar collapsed (always predicted any day now), it was untaxable. And still others -- the first really substantial group of adopters -- got into it b/c you could buy contraband with it, with the Silk Road and other dark web marketplaces. And not just buy drugs but buy BETTER drugs: excellent quality, safe, without putting yourself in danger. Finally, there were a lot of early applications for communities that weren't well served by existing financial systems, like sex workers, remittance workers, and refugees.

I would say, bluntly, that none of those really had a chance to take off before the tidal wave of get-rich-quick speculation came in and washed them all out.