There are two opposing thoughts regarding money I am considering at the moment. On the one hand, we have the idea that to the extent it serves a nonmonetary purpose, it is an inferior form of money. For example, gold, which is a form of money, also has various other use cases as jewelry, industrial raw material, etc. These use cases compete against the monetary use case.
Until Bitcoin, there was no contender for pure money. That Bitcoin lacked any other utility was hurled as a criticism. The idea was something like this: gold has various other utilities (and corresponding demand), so its price is unlikely to fall below a certain level; Bitcoin, on the other hand, due to absence of such alternate uses, would see its price collapse to zero some day.
This is not a good criticism. Most of gold’s price is a derivative of its monetary value. Should the monetary use disappear, prompting the circulation of the gold locked in the vaults of government entities, the industrial and other uses would keep the price from going to zero, but that price level would be a lot lower than it is at the moment. A price collapsing by 90% or 100% due to the withdrawal of the associated monetary premium is a pointless difference. Whether something is a good money is a question that should be evaluated strictly on the monetary properties of that thing.
Bitcoin’s inability to serve another utility is its strength. Whatever price it commands is because of its role as money. (We could, of course, discuss the premium associated with speculation, but that holds for any asset.) Various entities have tried to cram other so-called use cases, like inscriptions, NFTs and so on, on top of Bitcoin. These uses served only to compete against monetary transactions, driving up transaction costs, and deteriorating Bitcoin as money. (The only noncompeting use case I can think of is the use of Bitcoin as a timechain; but this utility adds no premium to the price of Bitcoin.)
Something serving purely as money, due to properties such as ease of division and aggregation, verifiability, inflation resistance, transportability, widespread recognition and distribution, etc, while being incapable of doing anything else, would be an ideal money.
However, this is where the contention of early Austrian Economists comes in. Economists such as Ludwig von Mises and Murray Rothbard would present that for something to become money, it would have to serve a different purpose first. Gold, not due to its monetary properties, but due to its use as jewelry, became globally distributed. Only because of the distributed holding pattern was it later capable of being used as a medium of exchange, a money. (Whether it was a good store of value is not a consideration at this point. We are discussing the medium of exchange property of gold as money.)
Now this is a valid criticism of Bitcoin. Without other uses to spread Bitcoin around, it remained concentrated within the cypherpunk community for a long time. And even today, it stays in exchanges and other centralized locations, for the most part (in terms of the population accessing Bitcoin, rather than the absolute quantity of Bitcoin, the majority of which is held privately by early Bitcoiners or has long been lost.) Bitcoin’s use as a store of value is emphasized more and more. When you try to use it as a medium of exchange, you find that the entity on the opposite side of the transaction does not possess Bitcoin or is incapable of handling it. This makes me wonder if a pure money is even possible.
Even so, in the case of Bitcoin, I don’t think it is the pure money use case that stifled its propagation and adoption. It is (1) the technical hurdle of learning about it, securing it properly, and (2) governments’ malice through legal ambiguity and oppressive tax rates that got in the way. There is no easy solution.