It is by definition deflationary due to its restricted supply. This would not be so much of a problem at the moment, if it wasn't for the fact that people started treating it as an asset in its own right, rather than an experimental medium of exchange. Most people have lost sight of the fact that it is the first iteration of a series of experiments to create a decentralised mechanism of value transfer. It wasn't going to be right the first time round.

Sometimes I feel that criticising Bitcoin for it's failures is like criticising Edison based on his first attempt at inventing the light bulb!