Similarly, there are countless examples of people's bank and investment accounts getting hacked, with the banks and brokerages reimbursing their customers to prevent bad PR.
Given this, I imagine that it would be a long time before the average person would be comfortable maintaining any store of money as Bitcoins (versus quick conversion and payment for things, but then what's the point?).
But also, Bitcoins can increase greatly in value especially since at a certain point it's guaranteed there's no inflation. I just don't see people willing to spend something that can increase so much in value. It's like paying for Reddit with fractions of Facebook stock.
Are you suggesting that bitcoins are struggling because people will not want to spend something that increases in value?
So bitcoins aren't purchased because they will increase in value too much?
That is the same circular logic that is used to explain "deflationary spiral", and it doesn't make sense.
Consider high tech equipment like a computer. You know that the price of a computer (or TV, or hard drive, or graphics card) will fall rapidly but you buy it anyway because you want to purchase it. It doesn't actually matter much that the price of the item is deflating. And these are for luxury items. Price deflation of goods matters even less when it is for something essential, like basic food items.
In other words, what you are saying is that the price of items priced in bitcoins will fall (because your bitcoins will become worth more and more), and therefore people will not spend their coins. However, we already see real world examples of deflating prices, where people still buy these items.
I'm sorry, but this is a statement you cannot make.
To make this claim, it would need to be true that the cost, in Bitcoins, of goods and services in the real world, would never rise.
There is no basis to believe this is true.
The difference between the two views is little more than semantics.
Both the Austrians and Friedman overestimated the role monetary policy can play. We've had a huge increase in the monetary base, but no price inflation since 2008. Austrians and to some extent Chicago-economists have predicted runaway inflation, and ended up with egg on their faces. But self criticism is of course nowhere to be seen as usual.
He is actually suggesting the opposite about the price of goods -- that they will deflate.
You absolutely can make the statement that the money supply of Bitcoin will not inflate in the long run, by the nature of their design.