📿 The Beautiful Glass Beads

This story explores the history of aggry beads in western Africa. In Africa, glassmaking technology was expensive and rare, giving the beads a high stock-to-flow ratio and making them highly salable across time. Their small size and high value made them easily divisible into bracelets and necklaces, meaning they were salable across scale, while also being highly salable across space. However, in Europe, the proliferation of glassmaking technology meant glass beads were cheap to produce, giving them a low stock-to-flow ratio. When European explorers visited West Africa in the sixteenth century, they exploited this technological difference by importing mass quantities of cheap beads from Europe. Over time, this slow, covert inflation destroyed the salability of the beads and eroded the purchasing power of the Africans, impoverishing them by transferring their wealth to the Europeans. This is a tragic historical example of the "easy money trap," which shows that any money whose supply can be easily increased will expropriate the wealth of those who use it as a store of value. Bitcoin solves this problem because its strict mathematical scarcity ensures its supply can never be inflated easily, protecting your purchasing power.