So, first things first: I tried recreating your material, and did not have the entire surface move, only parts of the surface.
EDIT: Took another look at your material and noticed your scalar parameter (called 2) has a value of 0, This is causing your entire surface to move at once.
However, even with only parts of the surface moving, the displacement still looked nothing like water. Normal maps store the (fake) direction the surface points towards, relative to the actual direction of the surface. This means: there is no way to calculate a height map from a normal map, without running a function over every pixel of the picture.
The theory:
You would have to set one pixel as the relative zero height and then from there add and subtract the height gain for each pixel, calculated from the normal map. I have worked on a UE4 integrated function which does this, but normal maps are not mathematically accurate, so i stopped trying. You will need the height map or a morph texture if you want tessellation.
You could look at the permanently free pack “Water Materials” in the marketplace to look at other examples of water.