Peercoin as a Backbone Store of Wealth. What Does it Mean?

I asked the following question in chat and ppcman asked me to make a thread for it so he could respond…

I hear the store of value argument a lot. What exactly does that mean? Does it mean the money you put into Peercoin will hold its price value? That would be untrue because of Peercoin’s price volatility, which NuBits solves. Or are people talking about Peercoin being a place to store value that is secure from threats? For example, Bitcoin won’t be a good store of value in the future once the $h!t hits the fan. Peercoin on the other hand is designed to be sustainable long-term, so the value that you convert to Peercoin will continue to be secure. Peercoin is basically designed to survive a nuclear blast. I imagine the latter is the type of store of value people are talking about.

[quote=“Sentinelrv, post:1, topic:3057”]Does it mean the money you put into Peercoin will hold its price value?

That would be untrue because of Peercoin’s price volatility, which NuBits solves.[/quote]

At the moment, we seem to have arguable standards around the world:

a) Gold
b) U.S. Dollar (questionable at the moment)

In Crypto, we currently have one standard that is terrible at it:

a) Bitcoin

We have emerging standards (BitUSD, Nubits, etc) to replace the volatility of Bitcoin’s “value”. These solutions give stabilization of price against fiat, but they need constant blocks carry transactions on a very quick basis to be able do it. If the market zigs, then they zag to compensate.

Consider how many transactions it takes to even out volatility. As the market changes, a price adjustment needs to occur, to offset the jump or sink in price against USD, etc. That requires blockchain speed and transactions, and nodes to handle it and secure the network.

But there is a different animal at play. What if you want to just “store wealth”. Then one day you want to move a large amount of funds, in a short period of time (10 minutes). You want to move $50,000 at once for example.

a) A blockchain that is secure, and stable, energy efficient, accepted as a standard, and doesn’t fork hardly ever. (consider Peercoin)

b) A blockchain that has as few transfers as possible in a 10 minute period due to a high transaction fee (consider Peercoin)

Bitcoin, at the current moment, has these 2 hour “brownouts” for people (my nickname), because of the block time, if there is a huge amount of transactions flowing through the chain at a particular moment (ie: market panic, etc), you could be waiting up to 2 hours to get your transfer added to to the chain because there are too many transactions ahead of you.

Other chains, Nushares, Bitshares, Ethereum, etc, are always going to have very large chains, with lots of added features and working parts. If I was storing a large chunk of wealth I’d look elsewhere for storage purposes.

Peercoin, if it normally isn’t used as a transactional currency… or a volatility stabilizer against fiat, can be that exact store of wealth with a higher than usual transactional cost for large fund transfers to keep the chain suited to that purpose.

This is one aspect. Whenever I talk about Peercoin, I think in terms of:

a) Bank to ATM $5,000 float transfer

b) Cryptsy to BTC-e $50,000 transfer

c) Noirshares to Bitshares $100,000 transfer

That kind of scale. But it wouldn’t be in fiat as a comparable denomination. If Peercoin was it’s own standard, almost like gold bars are, it would be:

a) Bank to ATM 5000 PEERCOIN

b) Cryptsy to BTC-e 50,000 PEERCOIN

c) Noirshares to Bitshares 100,000 PEERCOIN

…and the worth of buying Peercoin could be an averaged rate, that changes at fixed intervals, as agreed to by the industry supporting it as a whole.

We want the month of December 2014, to be worth $500 per 1 peercoin, and we’re locked in at that value, and every user of Peercoin (exchanges, noirshares, bitshares, etc) accepts it as being valid, then that means for the entire month of December 2014, we’re $500 a coin.

We can have a decentralized way of deciding the value if we want by consensus. I don’t know. This is thinking far ahead in the future.

But this is how I perceive Peercoin’s small, efficient, and low-transactional blockchain becoming a store of value.

As far as backbone technology goes for side chains, it could also be as an entry/exit point, with low intervals.

For example:

Ripple starts up with 2 million dollar funding. It buys a massive amount of Peercoin in one large transaction, to prove how many it has… it creates an offchain system transacting on that stored wealth that isn’t in a fiat bank account. When it does it’s month-end accounting, it either adds or subtracts from it’s Peercoin’s holdings as proof of ownership, etc.

The more I talk, the more I open things up for debate, so I might not want to keep going until I hear your comments. Hopefully I’ve given some food for thought.