In reply to Chris Farlee.

"an be less of a hassle than dealing with a retailer/seller that isn't willing to make things whole."

Businesses who do not willingly refund are to be avoided anyways.

"Escrows could work...but you need an arbiter, no?"

Yes, but escrow is not needed every time only in certain scenarios.

"As for replacing fiat...I'm having a hard time believing that a system
whereby the proof-of-work and accompanying mining 'reward' can be
sustainable."

Obviously, time will tell, it's still early. Note, that the mining reward halves every 4 years.

For me it already replaced fiat, but I understand that it's not for everyone at this stage.

Personally, I prefer an open source, transparent system to any centrally managed fiat.

"The system, at least in my mind, demands that the value of bitcoin continually rise to cover the ever increasing costs in power,"

Continually rising power consumption only happens if it's profitable to mine and there is demand (eg bitcoin is useful and getting more and more popular).

Due to the cap, increasing exchange rate is inevitable with more participants in the network.

"Isn't there a major risk that a 'bigger, better, faster' solution comes out and the bottom drops out on the value of btc?

It happened many times so far (CPU to GPU/FPGA to ASICS)

That's why difficulty adjust at every 2016 found blocks. It's a self balancing system.

The progress of bitcoin asics was dramatic so far because about 15 years of tech advancements were compressed into 3 years. (110nm to 32nm).

As we catch up with the latest tech, efficiency boosts will be in a lot smaller jumps.

As for mining farms, it's inevitable due to economies of scale (satoshi foresaw this). Also, factors outside of the scope of the protocol play a big part too (regulations, energy costs/subsidies).

"If ever there were a use case where bitcoin adds true value beyond what exists today, I'm thinking micropayments could be it."

international payments, friction-less payments, no counterparty risks (no account closures for whatever reasons and the like), better privacy (even anonymity can be achieved if wanted), hell, all my banks charge me significantly for keeping my money at them.

There's a lot of utility in bitcoin, I don't blame you if you can't see it immediately. It took me 6 months just to get it.