2) The supply is fixed at 21 million, but bitcoins themselves are not permanent. People die all the time without wills. People die with btc on a computer/flashdrive that no one knows about, they're gone. People don't make backups, their computer crashes, they're gone. You might think this is great, because now your btc are more valuable. But for a currency, it's not such a good thing, to have the supply eroding over time. Theoreticly, the amount of btc could eventually go to zero.