[runeks]

Prices only remain flat (0% inflation) if no increase in productivity occurs.

2% inflation doesn't mean the currency has been debased by 2%, it means: if it has become x% cheaper to produce a basket of goods -- and the price of this basket of goods has increased by 2% -- the currency has been devalued by (2+x)%.

Producers are constantly competing to cut the costs of production, in order to gain market share at the expense of competitors, so I don't see how flat prices can be a reasonable assumption.

[dmichulke]

Increase in production increases supply, so prices fall -> deflation.

Yes, inflation can have other reasons than debasement (for example, productivity decrease) but this affects both types of "money" - fiat and bitcoin, so I left it out to keep it simple