Nope my thinking is spot on. Unless you fundamentally change the way we use money then just splitting bit coins to be smaller and smaller won't work. They have a name for doing that, it's called deflation. Inflation to much money chasing to few goods and services. Deflation is to little money chasing to many goods and services. You have to create as much currency (what ever it is Dollars, bitcoins) to match the the goods and services on offer that people want. I'm a monetary reformist so I'm not against bit coins or any other community currency but, like I said. You can not use a finite resource as a currency in an exponential system.
Bitcoin is not deflationary in the monetary sense. The Bitcoin economy will opperate under constant lowering prices. There is absolutely no problem with that, despite all the wackos out there trying to say the contrary.
It only matters if you are talking of bitcoins as being a universal currency. If you are talking about bitcoins as a community currency same as itica hours then no not really.
Let Dr Albert Bartlett explain what an exponential funtion is to you. He does a better job than I ever could.
http://www.youtube.com/watch?v=F-QA2rkpBSY check out all 8 videos.
Prices adjust donwards. The video proves nothing.