Coin creation and store of value

Jan 27, 2021
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           The global economy is in a recession. The reality that we live today is a reality in which Central banks around the world are printing non-stop, paper currencies, in a rather meaningless attempt to reduce inflation, overcome economic crises and blockades and reduce debt levels. But despite such attempts, for many countries, the reality hasn’t changed at all, which makes us consider that there may be options that we are circumventing, and it’s the reason why we want to talk about coin creation as a store of value.

The rules have changed: Say hi to Blockchain tech

          With government bonds no longer providing any real rate of return, investors have been searching for other stores of value. Usually gold has been the most preferable asset: It has been the most precious, durable, and trusted store of value for centuries because gold is truly a mineral with a scarce existence. Some experts have figured that probably the amount of gold on earth could fit inside the Wimbledon Centre Court alone. This view can give us an idea of how valuable it is when it's so easy to print a near-limitless supply of new dollars every day but difficult to produce new nuggets of gold.

This is or was the idea that it’s said to have started Blockchain and the creation of Bitcoin as the first cryptocurrency. The possibilities of having a store of value different from gold, within a digital environment and yet with all the advantages that gold can provide. Scarce, transferable, indestructible (nor like paper, even though it can get lost) but traceable and secure, in other words, blockchain changed the rules for the true store of value.

But well, what is a store of value exactly? The dictionary defines it as the function of money that enables goods and services to be paid for a considerable time after they have been acquired or yet an asset that maintains its value, rather than depreciating. Most of us are used to a different definition of money, a piece of paper that can perish depending on political and economic choices made by a central government. But it’s different with crypto.

But why coin creation can work as a store of value?

          Something can be considered a store of value because is or can be accepted as payment for goods and services for its ability to purchase other assets in the future without rapidly losing its purchasing power. Imagine that, coins that you create can also have essentially perpetual shelf lives.

Many are those who say: I buy bitcoin to protect myself from local risks, such as economy, currency, and politics. But do they know they could actually create their own tokens to support their businesses and projects? Or even, those who support a big project and acquire tokens can become holders of a store of value as well, an asset that can grow in value over time or remain untouched supported by its significance and scarcity. Tokens that you create can be used to pay all over the world and remain under the same price and value, regardless of the economic crisis in any country, regardless of inflation or political measures.

Mary Schwartz