One point of contention re: inflationary vs deflationary currencies: When most Bitcoin proponents I've talked to say that Bitcoin is deflationary, they mean in

One point of contention re: inflationary vs deflationary currencies: When most Bitcoin proponents I've talked to say that Bitcoin is deflationary, they mean in the context of "bitcoin as exclusive currency". I.e. there are theoretically a finite number of coins, so in a world where they're actually used to buy milk and eggs they theoretically would increase in value over time, ergo deflationary. Unfortunately I find most Bitcoin adherents have at best a partial understanding of monetary theory (not that I can claim total mastery of that subject) in particular when it comes to understanding deflation/inflation. Inflationary systems can survive for many years in relative stability (cf. our current system) whereas in a deflationary system there is a financial disincentive to participate in the economy writ large, because your coins will be worth more if you just let them sit in your bank account. It encourages hoarding behaviour where large piles of coins sit dormant/stagnant and the engine of economic activity shuts down with lack of activity. I know people who bought 1000 bitcoins for pennies back in 2010 and they seem to be willingly blind to this, because of course bitcoin is not widely used. It's just something you buy for $X hoping to ride the next bubble of speculation and sell for $(10 * X) so you can cash it back into fiat currency and retire at age 35 to your oceanfront property you just bought. A vanishingly small number of bitcoin enthusiasts seem to actually want btc to replace all fiat currencies.