$Boost
Price and price discovery can be a great driver.
In a free market, price is a signal, is a way of communication. If the price of something goes up, it can mean 2 things. Either the demand increased, or the supply decreased. How would a market react to an increasing price?
The user of the product will be incentivized by the higher price to decrease back its spending, because it decreases his profit. What he can do:
* use less of it -> will decrease demand
* try to replace -> will decrease demand
So we can say, that from user side, the reaction will be decreasing the demand, because it is too expensive. And as the demand decreases, the price of the product will go down.
The manufacturer of the product sees that it has a higher price, so he will want to sell more of it (micro-macro economy 101). What he can do:
* make more of it -> increase supply
* make replacement products -> decrease demand/increase supply on something else.
So from the manufacturer side, the reaction will be increasing demand a.k.a selling moarrr. And as the supply grow, the price will decrease.
Of course these things does not happen in seconds, but both buyers and sellers are incentivized to act quickly otherwise their profit decreases and they will have to tighten their belts.
We can say that this is an efficient process, because everyone acting in their own interest influences the other participants positively.
In this logic, price acts as a signal to both sellers and buyers that they need some action.
Also in such a system, the buyers are voting on the products with their money. If there is a great demand on a product, it means people want more of it, so the sellers and any participant can know in the market, that it could make sense to manufacture that product. And as more companies start to manufacture it, the price will go down, because supply increases, but demand not. In this regard money as a signal, can be thought as a vote.
But let's imagine a hypothetical scenario, where I can create money. If I can create money, I can decide into which product I put money to, so I can skew the markets voting. Because if I buy from that money certain products, I can increase the demand for it, which will increase its price. This way, it may seem to the market participants that this product is in demand and they start to manufacture it, but when the supply increases, the demand is already gone (the money I gave disappeared), so that company wasted a lot of money on manufacturing something that will never return it back.