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What is sound money?
Sound money is money whose supply cannot be expanded at will by a government, bank or company, so its purchasing power is not diluted by new issuance. Some crypto supporters apply the term to coins with a fixed, publicly known issuance schedule, such as a hard cap on total supply.
Where people disagree
Supporters say money no authority can print protects savers from inflation and from governments financing themselves by debasement, and that a fixed, auditable schedule turns monetary policy into public rules instead of discretion. bitcoin.org also disputes the theory that falling prices cause a harmful deflationary spiral, calling it controversial among economists.
Critics say a rigid supply is a weakness. The BIS argues money needs a supply that adjusts to transaction demand, as central banks provide, and that a protocol-fixed supply makes a coin's value swing with every shift in demand, undermining its use as a unit of account or a means of payment.
What it means for you
A fixed supply schedule tells you how many new coins can ever be created, and you can check it in the protocol; it does not tell you what a coin will be worth. Coins with capped supply have still swung sharply in value, so a predictable supply and a stable price are different things.
How it works
bitcoin.org states that bitcoins are created at 'a decreasing and predictable rate', with yearly issuance halved over time until it stops at 21 million coins, and that no central authority can change this for its own profit. The idea draws on Nick Szabo's bit gold proposal, which sought online bits with the 'unforgeable scarcity' of precious metals, created with minimal dependence on third parties. BIS economists counter that because supply is predetermined by protocol, it cannot expand with transaction demand the way a central bank adjusts money supply, which they argue makes value unstable.
Sources: bitcoin.org: Frequently Asked Questions, Nick Szabo, Bit gold (2005), BIS Annual Economic Report 2018, Chapter V: Cryptocurrencies: looking beyond the hype · checked 4 October 2026
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