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RE: Bitcoin may not inflate vertically, but thanks to artificial intelligence the inflation might happen horizontally
I think your argument boils down to the fact that anyone can create a new (Bit)coin or fork the 'core' Bitcoin chain, leading to some kind of dilution.
Well, I think this is true but there are reasons that this will not happen a million times, just like not everyone starts a bakery (although theoretically possible. In a nutshell, I think market forces would prevent this. See a more thorough description of my thoughts on this point here: http://www.devtome.com/doku.php?id=altcoins_-_nothing_to_worry_about
The problem I see is that AIs could do it on their own respectively force it with their sheer transaction power. Using your bakery example my thoughts are: If creating a whole new bakery costs less than the price of one bread, then there will be an infinite number of bakeries, which produce one bread and sell that. If you consider the power of AIs and todays high frequency trading, this might be the consequence for crypto currencies as well.
But will there be an infinity number of humans using these infinite number of coins then (AI-systems in the end serve a master, a human)? By analogy, there isn't an infinite number of Facebooks either. The free market will sort this out just fine.