Again this deflation misunderstanding... Deflation is (might be) a problem with money as a wealth-storage facility; it's not a problem for a wealth-transfer te

Again this deflation misunderstanding... Deflation is (might be) a problem with money as a wealth-storage facility; it's not a problem for a wealth-transfer technology. People get confused about this because government-issued currencies serve both purposes. Let's untangle them. As a money transfer tool, you convert your wealth into BTC, spend them, and the receiver converts them back into his own currency (or other liquid commodity) of choice. If both conversions occur fast enough, you're both protected from BTC fluctuations. That's what non-speculators will do as long as the BTC remains highly volatile; by doing so, they keep the BTC liquid against their wealth-storing currencies. As a speculative tool, what makes BTC valuable is the fact that you can buy actual stuff with it. The value of the BTC will adjust so that the active BTCs (those already mined and regularly exchanged, rather than stored for speculation) will represent the value necessary for the liquid trade of BTC-priced goods. In the long term, an investment in BTC is indexed on the BTC economy. Since the cumulated value of all BTC-traded goods can't indefinitely grow faster than the actual economy, the value of a BTC can't indefinitely grow faster than a derivative indexed on the world's economic health. Conclusion: the BTC will asymptotically converge, either toward 0, or toward very-large-spread indexes such as S&P500. Economists' understanding of deflation is based on government-controlled currencies, where manipulations are expected. When you make wealth by hoarding a deflationary money, you bet that a government will reward you for not lending your wealth to someone who will put it to work. Nobody can make BTC do that: if less BTC-purchasable wealth is available, the liquid portion of BTCs lose value, and so does the speculative portion, thus counteracting the deflationary trend. And anyway, when was the last time economists accurately predicted anything but the past? :)