I don't understand. Did you buy a house in BTC or in USD? If you bought it in USD, then the value of it in USD hasn't changed. If you bought it in BTC, then your debt is in BTC. What am I missing?
You take out a 100k mortgage in USD. Over the next year, the USD suffers suffers from extreme deflation (increases in value). It is now worth twice what is was worth last year. As a consequence, wages begin to go down. Now let's say you were earning 50k a year while paying down a 100k mortgage (not assuming a downpayment, this is for simplification). Next year, you are now being payed 25k but still owe that 100k mortgage. And the house is now worth 50k.
It's more expensive in USD, yes. Which is a problem if you're being paid in USD, instead of BTC. In other words: if your debt is not in the same currency as your income, that might be a problem. Is that what you're saying?
You take out a 100k mortgage in USD. Over the next year, the USD suffers suffers from extreme deflation (increases in value). It is now worth twice what is was worth last year. As a consequence, wages begin to go down. Now let's say you were earning 50k a year while paying down a 100k mortgage (not assuming a downpayment, this is for simplification). Next year, you are now being payed 25k but still owe that 100k mortgage. And the house is now worth 50k.