> Are cryptocurrencies supposed to be a potential replacement for real life cash? This was my understanding of the motivation behind Bitcoin, at least.

This was the original stated purpose, yes. But this works poorly in practice. Hypothesized frictionless tooling that would make it easy to make purchases with crypto has not emerged.

Nowadays it's held more like a speculative asset with value that comes from scarcity and demand, much like gold (though gold has some industrial application which Bitcoin does not).