[clarkmoody]

I'm not sure which bitcoin advocates you're talking to, but they seem pretty far out there.

As for monetary policy, I would look to the history of currency devaluations in the wake of wars and emphasize that bitcoin cannot be devalued in the same way. Not that a nation would use bitcoin as its currency, but it begins to look more like the gold that used to back fiat currencies.

Even Rome debased its currency to continue paying soldiers, while throwing the citizens under the bus.

Re environmental costs: a future protocol change could update the proof of work function if this gets out of control.

> deflationary economics of the system itself

Strictly speaking, bitcoin's monetary base is monotonically increasing and never actually shrinks, which would be monetary deflation. I would also challenge the conventional wisdom that says "Deflation bad! Inflation good!" Again, not that a nation's currency will be bitcoin. It exists alongside other systems, behaving more like gold.

Ponzi scheme is almost not worth mentioning as the allegation is obviously ridiculous.