Here is my understanding of what it takes for an entity to be an effective currency.
According to economists, as a country’s government issues currency, the total amount of currency must neither be too small nor too large. The total amount of currency must be in proportion to the total amount of economic activity.
If not enough currency is issued, then that will act as an impediment to economic activity. Issueing too much currency is very bad: if you do that then you shoot yourself in the foot, and the worst case scenario is hyper-inflation.
In a world with many co-existing currencies: trade (hence, economic activity) is impeded when exchange rates are volatile. The best case scenario is when exchange rates only fluctuate, but otherwise remain in the same ratio pretty much indefinitely.
The director of a country’s central bank is walking a narrow line, adjusting the amount of currency in circulation according to how the country’s economy is developing.
I assume the designer of bitcoin is/was well aware of these things.
By design, the total nominal amount of bitcoin will approach a ceiling. The final total nominal amount of bitcoin is hardcoded; it cannot be changed.
Imagine what would happen if there would not be a ceiling to the total nominal amount of bitcoin. If the total nominal amount of bitcoin could keep growing indefinitely then bitcoin would be subject to inflation.
In bitcoin’s design it is anticipated that the exchange rate between bitcoin and the worlds currencies will never approach a final ratio. Over time average bitcoin payments will be in smaller and smaller nominal amounts of bitcoin. One year you pay one bitcoin for a car, some time later you pay 0.1 bitcoin for a comparable car. The software is already capable of handling very, very small subdivisions of bitcoin.
This property of bitcoin sets it apart from the world’s currencies. A national currency is a managed currency, the director of the central bank is tasked with regulating the amount of currency such that it responds to how the economy developes.
Bitcoin can’t be tampered with; the cryptography is secure. That is bitcoin’s strength, and its weakness. Unlike a currency, the total nominal amount of bitcoin cannot be adjusted.
For our currencies a mild level of inflation is maintained. That way investing money is (if done well) profitable, but hoarding money is a losing proposition.
In the case of bitcoin it’s the other way round: for bitcoin the incentive is not spend it, but to hoard it.