Bitcoins: The Second Biggest Ponzi Scheme in History

(I'm not a gold bug, I could care less about gold, if gold offends, substitute some other tangible commodity)

That's my point that Bitcoin is more of a commodity currency and is not (at present) a fiat currency. The fact that the electricity is gone doesn't make any difference. Mining gold requires fuel and labor which is gone, used up, and what remains is gold. This expense is what limits the production of and correlates the commodity to the underlying economy.

What is really interesting is your assertion that the value derives from confidence and not assets. I would argue that value derives from the fact that its supply is limited by the use of resources and labor.

The tl;dr on "inflation is good" is that it benefits people borrowing money. If your wages keep pace with inflation, then things like your car loan and mortgage ultimately cost less, leaving you with more inflation-adjusted money to lubricate the economy with. Inflation stalling (or even receding into deflation) means that it's much more expensive in terms of wage-hours to pay back an existing debt, which discourages people from taking on new debt. http://www.nytimes.com/2013/10/27/business/economy/in-fed-an... is a decent article on the concept.

A deflationary currency, by contrast, will heavily discourage borrowing. This analogy is a little stilted by the BTCUSD conversion, but if I agree to loan you 10 BTC to be paid back over 5 years so you can buy a $10,000 car, and over the term of the car loan, let's say that the value of BTC is going to increase from $1000 to $4000 (that is, the amount of value traded in BTC is increasing faster than the amount of BTC in the market), then you'd be a fool to take my loan, since you would effectively end up paying me $40,000 worth of BTC for a $10,000 car. This would discourage you from taking my loan and buying the car, just because of the behavior of the currency.

(That said currently, since lenders get a chunk taken out of their loan by inflation, they make it up in the interest rate. In a consistently deflationary market, it seems to my non-economist brain that the answer would be a smaller - potentially even negative - interest rate, which would be pegged at a point that the lender still makes money over the course of the loan without being overly discouraging to borrowers.)

With that out of the way. I don't want to live in a country or principally trade in a currency that can react as bitcoin. I don't have a lot of cash sitting in my bank account, instead I have a small amount of debt (only Banker salary allow you to buy a flat cash in London) so I fail to see any situation where a 10,000 % deflation rate can affect me positively. (Similarly 10,000% inflation - actually 0% inflation is the stuff I can deal and be happy with)

So I don't mind a uncontrollable currency as I don't mind the wind being uncontrollable. I mind hurricane and if I cannot afford to deal with it, I simply prefer to live in an area without hurricane or as a last resort, government provided countermeasures. So in my situation, one I share with the majority of the first world, I prefer a currency controlled by FED-like central banks, than a currency without control that can increase my debt by 2 order of magnitude and at the same time likely put me out of work. So it is a choice 100% pragmatic rather than based on any type of economic theory.

I would not mind to be convinced otherwise, preferably without assumption like "when everybody uses it", or "if a country like China uses it as its currency".

But right now, it seems opinion are split between people in denial with 10,000 bitcoin in their wallet assuring me that what is happening with bitcoin right now is Good (sometime with the argument "deflanationary currency is good" as if that did not require further explanation). Others are blog like this one made by doomsayer simply angry they didn't buy 10,000 bitcoin last year.