Under hyperinflation, people tend to run around with wheelbarrows of banknotes rather than reverting to barter. I'll have to think about it some more.
Hyperinflation only happens precisely because people have less and less interest in wheelbarrows full of bank notes. The reason it feeds on itself is that people desperately want to turn their notes into real goods or exchange for more stable currencies. That lowers the value of the notes even further since there are more notes chasing the same amount of desirable goods.
I'm not sure a hyper-deflation can really happen. What would that look like, merchants lining up outside my house trying to sell me another Blueray player for increasingly small fractions of a coin?
If no one wants to spend this money, can it really retain value for very long? I'm genuinely perplexed.
I think a key factor is that humans don't actually behave as rational utility-maximizing agents. Most people will treat the value of an asset as being approximately its current market spot price, and only slightly adjust in the direction of what they expect its long-term value to be.
I wouldn't expect merchants to line up outside your house, but their websites might list prices like "Blueray player -- 3.89 millicoins".
We've started a habit of creating periodic Bitcoin threads to confine discussion thereof to those threads and prevent excessive proliferation of Bitcoin topics in the discussion section. Here is a link to the last one, which links the other discussions. Lot's to talk about, and another bounce in Bitcoin's value (up to 33 then down to 24), so share your links and thoughts!