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Sound money is a type of money that free from manipulation or artificial changes in supply. When the people in West Africa use glass pearls as money it was a form of sound money because the supply of glassbeads was steady and didn’t increase or decrease massively. Because these beads where hard to produce back then the supply always faced a high demand and therefore the units represented a viable store of value and medium of exchange or – sound money. But one day Europeans came and found that they could bring a lot of such beads to buy things. Since in europe it was easy to produce such beads they where able to buy out the whole market which ended in hyperinflation and destruction of the economy.

Paper is not sound money because it can be printed easily. Only things that are very hard to produce such as gold or Bitcoin can be sound money as it is immune to inflation.