Have you read my post? I even mentioned "menu costs" in my response.

The issue is not that the currency has volatility, but that they refuse to peg the value. Scribophile is facing menu costs, but the menu costs are of their own creation. Simply allowing their prices to fluctuate with value would solve the problem. My point was that technology can make volatility a much smaller issue than it was in the past, hence why using old currency paradigms hinders thoughtful examination of the costs and benefits of a currency like bitcoin.

That alone doesn't prevent something from being a currency, it simply changes who prefers to use the currency, altering its supply and demand. Currencies have many characteristics and a "store of value" is just one. A volatile currency, may make a poor store of value and thus less favorable to companies that hold large cash accounts (the ones who have to do the hedging you mention), but this volatility may also make it desirable to other economic actors. By accurately reflecting the supply and demand (IE not having an artificially manipulated price as many global currencies do) bitcoin makes a much stronger medium of exchange than many other currencies in the world. The growing interest out of Cyprus is a great indication of this.

My main point was just that for a traditional controlled currency, volatility would be bad, but for bitcoins, which rely on supply and demand to set the price (this includes speculative demand), volatility is not necessarily a bad thing.