The difficulty increases or decreases proportional to the effort expended, so that new coins are minted every 10 minutes. The 21 million coin limit is hardcoded

The difficulty increases or decreases proportional to the effort expended, so that new coins are minted every 10 minutes. The 21 million coin limit is hardcoded. To your question about spending deflationary money, one theory is that people may buy more high quality, necessary goods than cheap crap.