This makes sense. However, gold seems to have taken that place in our society. Gold bricks are worth a lot, and are nearly useless. Is this a contraction example?[/quote]
This makes no sense whatsoever. It is probably written by someone so young and so immature that he has no life savings and thinks of money in terms of cheeseburgers! A large amount of “life savings” wealth is held in stock (ownership of companies) but do you use stock certificates to buy cheeseburgers? Far greater than the amount of wealth held in stocks is “life savings” held in bonds. There are trillions upon trillions of dollars worth of “life savings” held in government, corporate and municipal bonds. There is enough economic value held in bonds to buy the combined McDonalds, Burger King and Juicy’s hamburger franchise chains a thousand times over, but do you use a bond to buy a cheeseburger?
I would NEVER put my life savings into anything I could use today to buy a cheeseburger. I would consider doing such to be an incredibly naive thing to do. No offense intended.[/quote]
I think that we can’t compare Peercoin or any crypto currency to gold or stocks. There is nothing real, like some precious metal or a company, behind it. In the fast running IT world, companies and technologies are often short lived and quickly replaced if they don’t evolve. So thinking long term holdings with current cryptos seems a bit risky at the moment. The winning cryptos will probably be, in my point of view, those that will get mainstream first, and to get mainstream they should probably allow you to buy a cheeseburger if you want too
And in the case of Peercoin you have to be pretty confident in the 100 addresses (probably fewer people) that hold more than 60% of all the coins
And when you really think about it, it might still be easier to buy a cheeseburger with some gold than with PPC
This makes sense. However, gold seems to have taken that place in our society. Gold bricks are worth a lot, and are nearly useless. Is this a contraction example?[/quote]
This makes no sense whatsoever. It is probably written by someone so young and so immature that he has no life savings and thinks of money in terms of cheeseburgers! A large amount of “life savings” wealth is held in stock (ownership of companies) but do you use stock certificates to buy cheeseburgers? Far greater than the amount of wealth held in stocks is “life savings” held in bonds. There are trillions upon trillions of dollars worth of “life savings” held in government, corporate and municipal bonds. There is enough economic value held in bonds to buy the combined McDonalds, Burger King and Juicy’s hamburger franchise chains a thousand times over, but do you use a bond to buy a cheeseburger?
I would NEVER put my life savings into anything I could use today to buy a cheeseburger. I would consider doing such to be an incredibly naive thing to do. No offense intended.[/quote]
I think that we can’t compare Peercoin or any crypto currency to gold or stocks. There is nothing real, like some precious metal or a company, behind it. In the fast running IT world, companies and technologies are often short lived and quickly replaced if they don’t evolve. So thinking long term holdings with current cryptos seems a bit risky at the moment. The winning cryptos will probably be, in my point of view, those that will get mainstream first, and to get mainstream they should probably allow you to buy a cheeseburger if you want too
And in the case of Peercoin you have to be pretty confident in the 100 addresses (probably fewer people) that hold more than 60% of all the coins
And when you really think about it, it might still be easier to buy a cheeseburger with some gold than with PPC ;-)[/quote]
Point taken: Peercoin is risky. All cryptos are risky. Possibly in ten or twenty years they will have no value. Today they do but the value is volatile and changing I think primarily because people don’t quite know what to think of them. They are new: the promise is high, and so is the peril of losing a lot, or everything.
But they can be compared to Gold, Stocks, Bonds, Silver and US Dollars, Euros, etc. The way we compare them is on exchanges: change your gold for us dollars, change your us dollars for bitcoin, change your bitcoin for peercoin, and reverse. Or, change your bonds for us dollars and change your dollars for a cheeseburger. But to say that any of these holders of value, have no value because they can’t directly buy a cheese burger is simply ludicrous.
I don’t think the big winner in cryptos will be the first to high volume retail currency status. Technological blockchain limitations will limit this. Bitcoin is plowing a lot of new ground for all cryptos in this regard. Bitcoin is making many people open their minds to a potentially new form of value.
Not as a high volume retail currency, but as a lower volume backbone money or deep money; Proof of Stake cryptos meet all the various requirements of money better than any other means I am aware of.
I think the winning cryptos will be the most trustable, flexible, adaptable, long-lived cryptos.
Edit: Lest I be mistaken, please allow me to say, I would love to buy a cheeseburger with Peercoin. But I don’t think that is very important. I would not want to try to buy a cheeseburger with the gold I exchanged to buy the Peercoin. Gold is not sufficiently verifiable or divisible for such a small purchase.
I admit that I was a little quick to imply that liquidity and value were the same. But still, I don’t think shares can really be compared to crypto-currencies. Granted, their values both depend on offer and demand.
But when you hold a share, you hold a piece of a company that creates added value and a piece of the profit it generates.
When you own coins of a crypto-currency, you own something that has value only because some other people want it too. Crypto-currency technology is nice, but it is trivially copied. It wouldn’t be hard to start an exact copy of Peercoin, but it would be pretty much worthless. Why? Because it is the people who back Peercoin that give it value. There is nothing that makes units of a currency in a blockchain inherently desirable. In this respect, I think it would be wise to build a community of people accepting it as wide as possible.
My reasoning behind the cheeseburger argument is that crypto-currencies have more in common with fiat currencies than with shares, due to the lack of inherent value: would you invest in the US Dollar if you couldn’t spend it anywhere directly?
The core issue is that if there is no strong motive to buy a given store of value, what guarantee do you have that you will find buyers when you need to sell some of it to get a car or a house? One way to mitigate the risk is to have as many different buyers as possible (e.g.: cheeseburger sellers).
…and that is what Nubits will do, except they have chosen to sell sandwiches
A more serious response, I think you can see the Peercoin community as a company creating value for all stakeholders/PPC holders. Most of the stakeholder believe that we would be able to increase value or at least perform as good as or better than competing offerings in the long term. From my perspective they are very close to shares or bonds. It js just a financial stake in an endeavour with risks and rewards based on the performance of a group of people with a common mission.
I think there is some confusions about cryptoasset and cryptocurrency.
Peercoin is a cryptocurrency. It HAS to be a medium of exchange, and a good one at that, to be a good store of value.
If you want to save, you’d choose cryptoassets that hold value well. The asset probably doesn’t necessarily buy you sandwiches. The confusing part is that cryptocurrencies ARE a kind of cryptoasset, save/invest in cryptocurrencies is also in cryptoasset. Cryptocurency has some properties as any foreign exchange currencies – for example its value is influenced by fundamentals of issuing party, market demand, in flation … So you should consider these factors and only choose part of your portfolio in currencies because it can be risky.
Peercoin will be a good store of value if it behaves like a currency that is a good store of value, for example the backing system is political stable and the cirrency has such great depth and liquidity that billions buy or sell won’t cause the price to change much. To achieve the last bit, there have to be a lot of Peercoins in the market. It would be important to make the coins in exchanges and merchants’ wallet to generate POS blocks in a decentralized way.
In short one should save/invest in a stable asset. Peercoin as a currency can be a good assett if it serves all three functions of currency and keep its edge.
This topic is indeed very relevant to peershares/nubits.
True, but in my opinion, the performance of a crypto-currency community can only drive the price so far. It’s like a new ice cream flavor: it is good, some will like it better, it could even be objectively better, but it’s not life-changing and you wouldn’t pay an absurd price to get it. To drive the price any higher, you need to build up demand, and the prerequisite is acceptance.
I think you have a point there.
But after further consideration, I am wondering if it is really possible to have something that is both a good store of value and a good medium of exchange:
[ul][li]A store of value should ideally increase in value and/or generate interests[/li]
[li]A medium of exchange has to be liquid[/li][/ul]
If something generates profit, you don’t really want to spend it, and investing in something that does not increase in value is a poor investment choice.
There’s probably a middle ground, but I’m not sure it is possible to excel at both simultaneously.
Personally I would rather have something that I can spend anywhere in the world and that at least holds its value well enough so that I can keep some crypto-cash under my crypto-mattress, just in case.
I suppose there’s some merit to thinking of the community as a driving force.
During the adoption phase of a crypto-currency, the price will go up due to the increasing demand. But to sustain it, I believe the community has to promote demand, by rewarding those who accept the crypto-currency with some of the crypto-currency. This means providing liquidity to the market, by selling a few coins or buying goods with them, even if it seems to be at a loss. If it boosts demand, it will pay for itself.
Of course, there will be freeloaders who hog their coins while others do all the promotion. But if everyone hogged their coins while no one outside the community accepted them, then no one will buy in.
