How does Bitcoin help? Deflation is actually bad for the economy because people hoard money. It would be stupid to buy things because money gets more valuable over time while things depreciate.

It's funny to me that deflation being bad is an orthodoxy despite the paucity of evidence for this. Can you point to a deflationary episode that was harmful? Japan had the "lost decade" of slow growth, but is slow growth bad? Is the absence of conspicuous consumption lamentable? In comparison, people starve and flee, and societies collapse under episodes of hyperinflation.

The classic example of functional deflation is in technology: computers have been under substantial deflationary pressure from the increase in performance year over year, yet people still have bought computers, and the industry has still prospered despite this.

Likewise, civilization was largely built on hard money economies, and prospered, despite the difficulty of debasing within them. It has largely fallen under soft money conditions, as in the the Weimar Republic, or the debasement of the late Roman Empire.

Note that this "deflation is bad" orthodoxy is propagated by the same economic regime that embraces inflation as beneficial, and profits from the printing of money.

Bitcoin doesn't stop bubbles or protect you from one any more than investment in another asset - in fact it's more than likely a bubble itself.

The bubbles I've observed have been a product of or exacerbated by artificially low interest rates and the money printing that enables them. If Bitcoin achieves its goal, it will remove or reduce the power of the government to print money and otherwise set interest rates, which will enable market-based interest rates to emerge.

You are confused on concepts of inflation and bubbles.

Bubble happens when an actual value of something gets disconnected from its price. When people buy something for ever increasing prices without regard for actual value because they believe the price is going to go up.

In a bubble only the price of that one thing goes up, in relation of everything else.

In an inflation prices are representing the value of products but as value of money decreases the numbers representing prices must go up. In this case the price increase is caused not by increasing demand for the product but rather increasing supply of money.

Printing money causes value of existing money to be diluted because if tomorrow we have twice the amount of money in circulation than today but we are still buying same amount of products and services, then we will need to pay roughly twice the price to keep market equilibrium.

I disagree. Consider the housing bubble - it was tipped off by the response to the internet bubble, low rates from the fed so that people would borrow to get the economy moving again, e.g. by buying housing. Low rates result in more lending and buying, more lending and buying leads to price appreciation (pay attention, as this sequence is playing out again now), and eventually enough price appreciation and easy money leads to irresponsible lending and mania. The depreciation of the dollar through easy money lending has indirectly caused the bubble through the practices it encouraged.