Another reason deflationary currency is perceived as bad is not just because it makes life harder for debt owners, but because it can lead to its own form of boom-and-bust cycles by reducing economic activity.<p>If you know, for example, that your cash holdings were going to grow at 10% per year, then you'd be far less willing to spend any or invest in other assets, as merely putting bitcoin under a mattress increases value. This will reduce consumption and investment in the larger economy, inducing a recession or depression until overall demand for currency fell, pushing those who hold it to spend or invest to avoid losses. Of course, that equilibrium won't be permanent, and the cycle would begin a new, but with the major disadvantage that central banks nor government monetary policy can reduce the severity of the swings. (Although it's a matter of faith among Austrians that somehow there would either not be any more business cycles, or somehow the boom/bust wouldn't be "as bad")<p>Bitcoin to me looks like a good way to have a distributed settlement/clearing house system for transactions. But as a replacement for fiat currency, nope.