There are several factors that make it absolutely unable to replace fiat currency or even be the dominating crypto-currency in the transactions of the future. Among the largest concerns are:

1) Bitcoin is highly volatile. Any economist knows that hyperinflation and hyperdeflation in currency significantly undermines the economy. Bitcoin has both practically within each week. Consumer motivations are skewed, and instead of making purchasing decisions (is this worth buying?) - they have to think of investment decisions (dump or hold).

2) Bitcoin is limited in emission. This is similar to the point above. Even if Bitcoin price reaches stability, once it hits 21,000,000 - it will no longer be possible to produce. Assuming that Bitcoin is used for transactions, that will cause rapid inflation of price in comparison to the growth of the global economy, making Bitcoin obsolete very dramatically and very fast.

3) Lack of motivation for verifying transactions. Once no more Bitcoin is emitted, miners will not get BTC in exchange for closing blocks. Some additional systems may come into place, so unlike the point above - this is a problem that can be overcome... but why would we need to overcome it, when there are crypto-currency without this inherent flaw?

4) Transaction commissions are very expensive. In basic terms, it won't make sense to use BTC to buy a can of Coke for $1 USD, by paying $4USD to facilitate the transaction.

5) Waiting times. In the current economy, waiting times of 30 minutes are too high for effective day-to-day transactions. Imagining standing at a store checkout for 30 minutes, just to wait for transaction to clear.

In short, volatility and miner motivations will not allow BTC to make fiat funds obsolete. Those are only the causes inherent to Bitcoin. Other causes include the presence of crypto-currencies and that some of the economy will still remain centralised, as the economy mirrors the society. But I just wanted to talk about BTC here.