[mrb]

Critics keep saying that there is no incentive to spend it. But all the numbers indicate that there is increased spending: http://news.ycombinator.com/item?id=5296889 Therefore, no, I do not think it will cause its downfall. I guess people are irrational and still spend bitcoins despite knowing about deflation.

[lmm]

Spending makes sense because the future of bitcoin is uncertain. If you could guarantee that bitcoin wasn't going to crash, hoarding would be a guaranteed winner and people would stop spending (and ironically enough, it then would crash).