Please don't waste your time typing the usual nonsense about how bitcoin can be divided into infinitesimally-small parts. Nobody is (or has ever been) seriously worried about that. It would be as if saying the primary problem with hyperinflation is that you need to put too many zeros on your bank notes. Imagine if someone asked about the feasibility of fiat currencies and the response was "No, we've planned for that: There will be extra space on the end of the bank notes to print more zeros." Absurd! Yet, that's the standard argument from bitcoin proponents when it comes to deflation (only in reverse).
The problem with bitcoin is that its designers believed that hyperinflation=bad necessarily implies that hyperdeflation=good. If that were the case, then bitcoin would be the perfect currency. Actually, both are fatal to an economy. Economies basically shut down when currencies start to deflate. It turns into a giant game of chicken: Nobody wants to spend his currency first because he knows it will be worth more later. First people delay luxury purchases, but before long you end up with a vicious circle and people wait until the very last second to purchase essentials like life-saving medicine. There is a way to stop this, of course: Print more money (Hey, that's kinda like how the solution to hyperinflation is to stop printing more money! Who'da thunk it?).
>Nation States don't want this, as it restricts their expansion.
Or we can take off our tin-foil hats and admit that Bitcoin sucks and was designed by someone with little understanding of economics or the history of money. In order to be a useful currency, the total number of bitcoins needs to track the size of the portion of the economy that uses bitcoins. Bring me a cryptocurrency that was designed by someone who is more interested in making a solid, practical currency than rigidly following his ideology, then we can talk. Nobody in power is in any way threatened by bitcoin. It will implode by itself without any help from the outside (though I'm sure it will get some helpful nudges in that direction).
I'll close with this: Part of engineering a good system is making prototypes and seeing what doesn't work. Another part is looking at competing products and seeing where other engineers went wrong. Blind, religious adherence to the principle of deflation is only going to cripple the adoption of alternate currencies.