Yes, except gold and silver don't scale. Bitcoin scales, it's almost infinitely divisible and can be traded without a third party on the internet. It's Gold 2.0.
> I'm trying to understand this. If everyone puts their money into Bitcoin, inflation won't eat the value of their money so they won't try to increase it by investing into dividend-producing businesses? Otherwise how is this "script" "flipped? I don't understand this line of reasoning.
No, but if bitcoin proves to be the better investment (which it has over the last decade of its existence) people will put their money where they can get the best return. Bitcoin is still largely unproven and considered risky but the more times it increases exponentially in value the more stable and secure it will seem.
To put it another way - If I had 1 million dollars ten years ago conventional wisdom would have said the absolute best place I could have put it was either the stock market or into real-estate. Looking back obviously there would have been no better place to put it than into bitcoin but nobody knew that back then.
The more people who move their investments away from "Conventional" investments like real-estate and into more inclusive assets like bitcoin the better it is for society as a whole. It's well documented that one of the big reasons silicon valley is so expensive to live in is because Chinese investors are moving in and purchasing real-estate just to sit on, good for them, bad for people in the area who get no piece of that economic action.
I could go on and on. I'm not going to pick apart every point you made but I certainly can, I think you'll see the light in a few years when bitcoin does what it does and skyrockets again.
Can I ask you this though: Do you think bitcoin will gain in value from this point on or do you think bitcoin will fizzle out, and why do you think that?