I don't know what you think you are saying but you've just proven the argument. If you only make the minimum necessary transactions then your economy will be of minimum size.
>If there is an asset that goes up in value, you will want to store your wealth in it.
It's just a balance sheet. If the value of the asset goes up it just means the allocation of resources is biased to BTC earned in the past. You also cannot store wealth in Bitcoin. You have to give up real wealth to own Bitcoin.
>if you can directly pay with something that is also a good store of value, then for the individual that is simply the superior choice.
Sure, the individual wants his share of wealth to grow at the expense of everyone else. After all, who the hell would be against free shit that you don't have to work for?
>That is due to other factors, not deflation. >Not many people accept payment, people are forced to hold dollars paid in dollars and there is friction when converting.
Literally nobody is forced to hold onto dollars. If anything central banks want people to stop holding dollars because of low inflation/the deflation problem.
> Bad money gets spent first (Gresham's law).
I don't know if you have noticed but bad money being spent first is snowwrestlers' argument. You've supported a supposedly completely invalid argument yourself...
>The deflation problem that you imagine doesn't exist. There are other more worthwhile arguments against deflation but you didn't use them
They boil down to the same thing. Deflation doesn't increase real wealth it only responds to real wealth increases by allocating the real wealth to people who held onto more currency. It is equivalent to an income tax that is then redistributed via a UBI that pays out proportional to how much BTC you own. If you know that you will get more wealth extorting other people you will refuse to spend your Bitcoin because it increases your ability to extort people in the future.