There are a number of fallacies surrounding the arbitrary limits of this purely electronic fiat currency.

1. There is no limit to the # of transactable units. Once the 21,000,000 limit is reached, but more likely much sooner than that, bitcoins will be subdivided, much like dollars are subdivided into quarters, then dimes, then nickels, and so on. Each time a subdivision occurs, there will be a resulting deflationary adjustment as subdivided units increase in value, generally the opposite of what Quantitative easing does. So if 21,000,000 bitcoins are worth $500 each and they split, does anyone think the value of half-bitcoins will be $250 for very long? If the interest in the currency remains strong, they should go up in value quickly as demand rises to meet supply.

2. There is nothing backing the intrinsic value of bitcoins. No one has any reserve set aside to cover the current or future circulation of bitcoins. Think of a bitcoin as similar to a promissory note or IOU. It is one person saying they will honor the redemption value at some later date, without actually putting up any collateral to back the statement. In the event of default, there is no asset forfeiture to rely on. The only remedy would be to take civil action against the debtor, using the legal system to compel forfeiture of assets not contractually liened.

3. Bitcoins are unregulated, there is no safeguard against counterfeit. No electronic security system is 100% reliable, and you can bet that there will come a point in time when bitcoins, like any other electronic banking transaction system, will be compromised. Thousands of people are trying to hack the bitcoin system already. At least with dollar bills, I can elect to keep them in my safe at home, or a mason jar buried out in the back 40.

4. You must have access to technology to use bitcoins for anything. You can't carry bitcoins in your pocket or purse. They aren't real. If you have bitcoins when technology fails, your bitcoins are virtually gone.