First of all, not all existing cryptos are deflationary. Off the top of my head, Dogecoin is the best-known example of an inflationary crypto. There are about 110,000,000,000 Doge in circulation at the moment, and that number will increase at a rate of a little over 5,000,000,000 per year ad infinitum.
Secondly, the inherent deflationary nature of Bitcoin has not yet come to pass. Coins are currently being mined at a rate of 4% per year, halving about every 18 months. Once the inflation rate for Bitcoin goes negative, only then will we be dealing with a truly deflationary currency. It only seems deflationary now because the demand for Bitcoin is drastically outpacing the rate at which it's being inflated.
Finally, the inability of the state to inflate Bitcoin at will is the point. If you want to keep your capital in a state-controlled inflationary currency no one is going to stop you. What I and others in the Bitcoin community believe will happen is that "bad money will drive out good". People will spend their dollars and hoard their Bitcoin, as they will understand that dollars will be worth less and Bitcoin more in the future. The only way to stop that from happening will be a drastic reduction in the number of dollars in circulation... which again, is kind of the whole point for many of us.
> The use case for bitcoin is the same use case that makes up 95% of the price of gold - its predictably scarce. Thats its value.
That's one use case, yes. It's not the only use case.
Capital being held in "state-controlled inflationary currency" would be unusual. Capital would usually be composed of real-estate, stocks, ETFs, bonds, gold, commodities, maybe an art collection. Arguably US treasury bonds are not that different from holding actual USD, I concede that. But a share of Apple is a share of Apple. It doesn't matter if you quote it in USD, EUR, BTC or gold nuggets: its intrinsic value is the same.
In fact the richest people I know are all negative USD, and very positive everything else (especially real-estate), because they borrow USD to invest. The poorest are also negative USD, and holding only liabilities with little assets. It's only the ones in the middle that are positive USD. Basically not rich enough to buy real-estate (or not interested), but certainly not poor either.
May I ask you a question: would you borrow Bitcoins to, say, buy a plot of land in the middle of Arizona, plant vines and start making wine? This is why as far as I am concerned I don't see Bitcoins as any sort of competition to USD, EUR, JPY, etc. It's just yet another asset that may or may not prove to be a good investment in the long run. I hold some, just in case.
Secondly, the inherent deflationary nature of Bitcoin has not yet come to pass. Coins are currently being mined at a rate of 4% per year, halving about every 18 months. Once the inflation rate for Bitcoin goes negative, only then will we be dealing with a truly deflationary currency. It only seems deflationary now because the demand for Bitcoin is drastically outpacing the rate at which it's being inflated.
Finally, the inability of the state to inflate Bitcoin at will is the point. If you want to keep your capital in a state-controlled inflationary currency no one is going to stop you. What I and others in the Bitcoin community believe will happen is that "bad money will drive out good". People will spend their dollars and hoard their Bitcoin, as they will understand that dollars will be worth less and Bitcoin more in the future. The only way to stop that from happening will be a drastic reduction in the number of dollars in circulation... which again, is kind of the whole point for many of us.
> The use case for bitcoin is the same use case that makes up 95% of the price of gold - its predictably scarce. Thats its value.
That's one use case, yes. It's not the only use case.