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.
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.