Let's just pretend that one day btc will stabilize vs fiat, or that fiat simply just goes away and we are left with bitcoin only.

The hard cap on the number of btc is a big mistake because it will ultimately be very deflationary.

BTC supply has a halflife due to loss. I don't know what that halflife is, but it is a statistical fact. Therefore mathematically, the number of usable btc's will one day be practically zero. The currency will of course be unusable before then due to scarcity. There is no way around it. People will grow old and die without divulging their keys. People will lose or forget their keys. Computers will fail and lose keys. Just like people thought at one time we will never run out of IP4 addresses, the day will come.

Furthermore, in the meantime, population will grow. New people are born every day. More than the amount who die. These new people will one day be old enough to get their share of bitcoins, sharing the supply with the ever growing number of people who are still alive.

It doesn't matter that btc's are divisible to the nano btc. That's not the point. The point is to have a money supply remain constant in ratio with the population. This can't be done with a hardcap. The halflife due to private key loss exacerbates this problem.

I didn't even get into the fact that new, sustained wealth created by innovation or labor needs to be represented by fresh currency issue to prevent deflation. This type of currency issue requires an issuer to identify brand new wealth and so is not suited for a distributed p2p network of computers, so we don't even need to go there. Maybe just figure out an average and go with it.

Inflation and deflation are 2 sides of the same coin. Both are bad for participants in the economy, through no fault of their own. Either way, some sectors of the economy benefit unfairly and some suffer unfairly. You can't say that deflation is good and inflation is bad. It doesn't work like that. They're both bad. The changing itself of the value of money up or down as the change works its way unevenly through the economy is what hurts people. Both inflation and deflation change the value of money.