What is Sound Money? A Look at Bitcoin’s Emergence26

Throughout history, there have various iterations of sound money, from the Rai stones of the Yap islands to the gold standard. However, sound money has remained elusive over the last century following the proliferation of credit expansion through central banking fractional-reserve policies that lead to endemic inflation.

Sound money is consistently touted as a necessary prerequisite to a prosperous society and a stable price mechanism in free market economies by the Austrian School of economics. Eminent figures such as FA Hayek, Ludwig von Mises, and Carl Menger detailed the root causes of ‘boom and bust’ economic cycles as the extended inflationary monetary policies that have come to dominate government direction since the 1930s.

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