Hard money refers to a form of money whose supply is difficult to expand, giving it a high stock-to-flow ratio and resistance to debasement. Historically embodied by gold, the concept extends to assets like Bitcoin whose issuance is algorithmically constrained. Hard money is valued as a store of value because its scarcity cannot be diluted by discretionary issuance.
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- The defining property is a high and rising stock-to-flow ratio: existing supply greatly exceeds annual new production, so its purchasing power is shielded from inflation. Proponents argue digital hard money combines gold’s scarcity with superior divisibility, portability, and verifiability.