Peercoin: A transactional currency or nah?

General
1

Some thoughts from yesterday that I think can be expanded upon

[quote=“fractals, post:33, topic:3463”][quote=“levent, post:32, topic:3463”]What determines the value of money?
We need to discuss this situation

money What is not clear is?[/quote]

Money is inextricably linked to every person on this planet, yet rarely does a person ponder how money came to its current state. The populace spends the majority of their time working a job, with the motive to make money. With few people focusing on the importance of money itself, we are left with the current monetary paradigm, one in which money is controlled by nation states and central banks.

The three functions of money are unit of account, medium of exchange, and store of value.

The unit of account has characteristics of being divisible into smaller units and being fungible. This is accomplished with different denominations of notes, and standard currencies that do not differ. Medium of exchange solves the problem of coincidences of wants that the barter system could not solve. Store of value permits that money must not lose considerable value over longer periods of time.

Fiat currencies are able to accomplish all of this effectively, however the store of value has come over threat with the issuers of money inflating the money supply at considerable rates. Even with moderate inflation levels in the United States the depreciation of the value is considerable over longer time frames. This threatens the store of value of money and may lead into problems such as hyperinflation.

Peercoin accomplishes unit of account and medium of exchange well, but struggles with store of value. If we look at the price of Peercoin now it is not a good store of value from where it was a year prior. I remember the Peercoin community advertising Peercoin as a store of value. I can see Peercoin accomplishing store of value through a low inflation rate that is not susceptible to the whims of governmental entities.

Ultimately money relies on perception, the Peseta was once valuable and now worthless as Spain transitioned into the Euro. What was once perceived as valuable is now worthless. Money relies on perception of value.[/quote]

2

[quote=“fractals, post:34, topic:3463”]I do not think Peercoin should focus on being a transactional currency rather a backbone like system where applications are built on top of it.

For example, a blockchain for hosting cryptoproperty. A service comes along that tags the ownership of precious art on to an application run on top of the peercoin blockchain like counterparty or something. This allows the world to see the owner of this piece of art on the public blockchain. It can be used to verfiy ownership and prove transfers or property.

Also, Peercoin to be used as a token for DAO’s dividend distributions. If it can be a token for DAO dividend distributions it will better act as a store of value.

The barrier of entry to replicate Peercoin PoS is incredibly low. A larger network like Facebook could easily copy Peercoin and distribute it to far more people who will perceive this new currency as money. However, there are legal ramifications for a corporation to do this.[/quote]

3

If we are competing to be a transactional currency we have already lost the battle, look at the economics of Nu and the merchant adoption of Bitcoin. We must compete in a different niche. To create a blue ocean strategy and stop competing against the hundred of currencies vying to be transactional currencies.

We must decide as a community where to focus our efforts.

Sunny King mentions crpytoproperty in his interviews, first and foremost lets define cryptoproperty and brainstorm applications that may fit this category.

4

[quote=“fractals, post:3, topic:3466”]If we are competing to be a transactional currency we have already lost the battle, look at the economics of Nu and the merchant adoption of Bitcoin. We must compete in a different niche. To create a blue ocean strategy and stop competing against the hundred of currencies vying to be transactional currencies.

We must decide as a community where to focus our efforts.

Sunny King mentions crpytoproperty in his interviews, first and foremost lets define cryptoproperty and brainstorm applications that may fit this category.[/quote]

Emeth has some thoughts that Peercoin may be better to serve as large paypment transaction like ACH, not small payment like PayPal.

Emeth:
This had got me thinking about what problems cryptocurrency was actually best-suited to solve. The results of my thinking more or less landed me in the same boat as SK, with regard to a backbone currency and thinking of Peercoin as moreso solving the ACH problem, rather than the PayPal problem.
https://www.peercointalk.org/index.php?action=profile;u=32312;area=showposts;start=60

In Sunny King’s interviews, Sunny King prefers Peercoin focusing on data applications which have a common base currency - Peercoin!

The above two points are my understandings.

5

I’m a little late to this post but I wanted to speak to the argument that Peercoin is failing as a store of value.

By that logic Bitcoin is also failing as a store of value. When a cryptocurrency whose value is based on supply and demand is young and has a small market cap volatility is a natural growing pain, this does not mean it’s a poor store of value-- it just means whales have money.

At such a small market cap in the millions, said whales have the ability to manipulate the price up and down as they please, then there are periods when the price stays low when the coin isn’t garnering attention.

As more businesses begin to use a crypto, more people pick up on it’s usefulness and decide to invest, and otherwise organic growth occurs naturally, this becomes less of an issue. As demand increases and the price goes up the market cap goes up also. A crypto ultimately will thrive or die. If it dies it’s basically a big complicated pump and dump pyramid scheme. If it thrives, then as the market becomes saturated with users and the coin becomes ubiquitous then there should be a tremendously high price with a market cap in the high billions, maybe even trillions.

That’s when the whales are powerless to manipulate the price, whats a few million bucks in the face of the whole world being invested into a coin?

Gold has been reasonably stable as a store of value because it has hit this plateau where you basically have to be Bill Gates to manipulate the price. If everyone just gave up on it and the market cap fell into the millions again then the price would be much more volatile.

Same with cryptocurrencies. Until they become mainstream they will appear to be a crappy store of value. It’s an illusion. They’re just a baby. Someday they will grow into nice, stable, crypto-adults and that is the point at which they become a great store of value.

it’s merely a matter of patience, and that’s why there’s a lot of money yet to be made in this game.