...also, the point of a currency is to act as a STABLE unit of exchange, not some speculative moon-shot.
Once these money supply and stability issues are ironed out, and once the scalability problem is solved, I think we might really have something.
Very few informed observers seriously expect crypto to become a general-use currency. That's a role it detached from years ago, first in practice and then in rhetoric.
The closest analog to what crypto seems to want to become in our financial markets is in risk-free assets. Universal collateral. This used to be gold. Now it's Treasuries and Bunds. None of those markets are terrifically efficient or universalized. And neither requires long-term price stability; just predictability.
(Note: it does not follow that crypto will be as valuable as e.g. the Treasury market. Treasuries serve as a safe asset. They also finance the U.S. government. Figuring out the worth of the former detached from the latter is difficult.)
The argument is invariably "the value of cryptocurrency is giving us a currency that's not controlled by central banks". Never have I seen someone saying cryptocurrency should be used because it's highly volatile and great for speculating.
So there seems to be a significant divide between the people who use cryptocurrency (but don't attach a moral value to it) and the people who believe in cryptocurrency (but ignore what it's actually used for).
Your "fact" encodes a lot of presumptions. Bad for whom?
Moreover, post-civil-war US (deflationary) is a good counterexample, not entirely clear that that era was "bad", hell, a good chunk of the population was emancipated from slavery amidst deflation.
And the inflationary consensus in mainstream economics is not one born out of reason, evidence or good faith. The truth is, inflationary monetary policy is mainstream because of political reasons, not economic ones.
- bitcoin tends towards 21 million mined bitcoin, but just like mathematical limits that means that it will continue mining some bitcoin essentially forever (progressively smaller and smaller amounts).
- people forgetting or losing their keys doesn't make bitcoin deflationary anymore than it makes the USD deflationary. Furthermore that is not something inherent to bitcoin, but simply a practical result.
If an asset is deflationary, I have an incentive to hold onto it as long as possible. Spending it is costly.
If an asset is inflationary, it's costly to hold it.
If everyone receives an inflationary asset by default for goods/services and everyone wants to trade it for something else, we have an extremely liquid asset that can be exchanged for other things -- currency.