I see the big hurdles to it being used for money, rather than simply an asset, to lie in making transacting with it directly, and holding it directly, having as little friction as possible, because it was precisely the friction inherent in gold that allowed it to lose out to IOU's on it, and finally to fiat.

Big issues I see right now are working the kinks out of the Lightning network, establishing an easy to understand and implement way to handle estate planning (at best this is something the real nerds have figured out how to do with multisig, but it's a clunky and arcane process), and overcoming concerns about possible loss from self custody.

This last point may be one that we can only ever be approaching, rather than ever truly have in our grasp, given that people have these concerns even with fiat money -- many use bank accounts even when interest rates are near zero, and when they do most of their shopping locally, simply because with FDIC insurance, it's just safer to have the money in the bank than it is in your pocket, or even in a safe at home.  You could get fireproof safes, sure, but this is where we really look at the cost of insuring your funds, and no safe is 100% foolproof.

Honestly I half expect that rather than doing this work sufficiently ourself, seeing the FDIC's illusion of being foolproof destroyed with a monetary crisis is more likely. The math behind it doesn't work out -- their best case scenario is that at some point, when banks fail beyond what they can afford to bail out with existing funds, they'll simply be authorized to debase currency in a giant sweep -- worst case, they'll be forced to simply default, allowing insured claims to nonetheless go unpaid. While banks may have recognized the reality of counterparty risks between themselves in 2008, it will likely take this sort of crisis for the average person to seriously consider self custody less risky than using custodians to safeguard their wealth.