Bitcoin is dead when the flow of new fiat to the exchanges stops. That is easy for the exchanges to measure but hard for most people. It doesn't seem to be a published quantity.

Sure you can claim that it's not dead even then. Surely, people could be trading goods for bitcoins among themselves in the absence of fiat/exchanges. Dismantling of exchanges does not directly cause (or logically imply) a lack of desire to trade.

However, since the OP specified BTC Price, it is foolhardy to dismiss the correlation. Fiat exchanges were created in anticipation of supporting those who wanted to trade without mining bitcoin. Without desire from those folks, BTC price has no meaning. Exchanges become merely pari-mutuel wagering facilities taking a rake until there are no more rakes left to take.

You're a smart man.

In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.[1] When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a loss of real value in the internal medium of exchange and unit of account in the economy.[2][3] A chief measure of price inflation is the inflation rate, the annualized percentage change in a general price index (normally the Consumer Price Index) over time.[4]

http://en.wikipedia.org/wiki/Inflation

Only in the sense that each unit of currency buys fewer goods and services, and has an erosion in it's purchasing power.

So, not in the sense that BTC people like to here, only in the "scientific definition" sense.

Yeah I dont understand how you miss the point of we need bitcoin to be stable and around 10 bux a bitcoin for it to work.  Its not for speculators, its for mining.  It costs more in electricity, a computer rig with at least one good graphics card to mine one bitcoin then what one bitcoin is worth, that is a major problem.  Also the price isnt stable, so no businesses will want to risk accepting bitcoins when they could sell a shirt that cost them 10 dollars to make for 5 bitcoins at 2 dollars per bitcoin but then next week there same bitcoins they took for that shirt are only worth a dollar a bitcoin, they just lost 50 percent on there shirt sale.  Nothing will ever come of this great bitcoin, cryptography system if these two things do not change.  There needs to be a stable wall, between 10 to 15 dollars per bitcoin to let businesses work within the confines of the bitcoin structure and not take losses.  It also needs to be around 10 bux for miners to create bitcoins and keep creating them or else it will take 3 years at 2 dollars a bitcoin just to pay off there mining computer, would make no sense.  So until these things happen it will remain a toy for nerds that enjoy the concept of bitcoins, which I do love the concept and love bitcoins, they just wont work in real life.  I am using 10 to 15 dollars knowing how much it cost to make a bitcoin at this point in time with what graphics card and build you would have to buy and how much it equates too.  Now later on, or if you were an early adopter, that price point might be 3 to 6 dollars a bitcoin, but either way there needs to be a stable wall that makes sense for speculators, miners, and businesses. This is what were missing and doesnt exist right now that is causing bitcoin to just be a fad.

I mined plenty too, what does that have to do with anything. The difficulty changing doesnt change enough by dropping to make it so much easier to create a bitcoin and cheaper to create a bitcoin then 2 dollars that 1 bitcoin is worth at this point does it?  No one will mine if it doesnt make financial sense and you lose money, no business will accept it if there bitcoins are worth half as much tomorrow as they were today, keeping it as a fad that will pass on, or if u dont want to say fad and make it sound cooler its an experimental micro economy that its advocates would like to see increase in size.  That just keeps it a nerdy, cool, fun little thing to play with.  The point of bitcoin would be to have it function better then a dollar does.  A dollar is stable, still a dollar today, still a dollar tomorrow, prices of products change, but not the dollar.  Bitcoins change in value and the products change in price, you cant have both, and the cost of making bitcoins is very high right now.  U need stability, u need a good price point or were just buying useless small items on forums, trading them for some reason, when really you could buy it for a dollar. Unless you need to buy drugs with it.

Think very high difficulty. Think Google and Walmart setting up datacenters for bitcoin mining with onsite power generation. Think oilsand plants in northern Alberta using their cogeneration plants for bitcoin mining (using ASICs of course (more efficient than FPGAs)). Think thousands of transactions an hour, pushing home Internet connections off the network (must pay $300/month or more for business Internet).

but the only reason they would do that would be if bitcoins were worth a lot more than they are now.

bringing your profitability back up again.

the point is not everyone has a credit card, or even if they do have one, not everyone wants it connected to their purchases.

there have been so many times lately where i've been to a site and really wished they accepted bitcoins, because for me, they're 100x more convenient.

example: http://rapidxhtml.com looks like a great service, but completely useless to me because they only accept paypal.