Please explain to me how supply of bitcoin can shrink. At some point in the future there can be less than 12 million bitcoins mined that today? How?


Supply of bitcoin is ever-growing and it will be until the very last one is mined. But that's not inflation, that's just supply.

Thing you can see on the markets with one bitcoin being worth more and more compared to fiat currencies, that is deflation of bitcoin. And deflation is good thing for all basically parties involved as long as economy of some nation (or world) doesn't depend on currency that is deflation. Bitcoin is long way from that point.