Comment by anigbrowl

Quite. Bitcoin has built-in authentication, which is a key feature of a traditional currency, and scarcity as well. But as long as it's not any kind of legal tender, there's no guarantee that any transaction or payment of debt offered in Bitcoin will be accepted, and that introduces considerable friction into its use as a currency. Also, the scarcity is arguably deflationary; nobody goes into solo mining any more because it's obviously not worth it, and the more coins that are mined the lower the incentive to go into mining. This means holding bitcoin results in appreciation proportional to population growth, even though no useful economic activity is taking place when someone sits on top of a pile of cash. The whole point of inflation is to reflect the natural rate of economic growth and to discourage economically inefficient hoarding. Runaway inflation is of course a bad thing, but no inflation at all, or deflation, is just as bad in economic terms.