Inflation is when the value of your money goes down because prices go up (i.e. the prices "inflate"). If I could buy 1000 loaves of bread with 1BTC last year, but this year I can only buy 900 loaves with that same 1BTC, that's inflation.
The most common form of inflation is due to an increasing money supply, but it (as demonstrated with Bitcoin) can have other causes.
The most common form of inflation is due to an increasing money supply, but it (as demonstrated with Bitcoin) can have other causes.