In the cryptocurrency space, the term “store of value” has really become a phrase that just gets thrown around often. This phrase is very prevalent in the precious metals sphere. The belief is that because gold is rare and it’s not easy to mine, it retains it’s value since more people hoard it because of it’s scarcity. Now there has been investigations disputing this scarcity, but that’s a topic for another day.
Gold as a store of value is actually playing out in countries like Venezuela and Zimbabwe where they have currency crises. The inflation for these currencies have been in thousands if not millions of percentages. People have been converting these currencies for Gold and even Silver and are surviving on these in the hard times these countries are facing. Now the issue of counterfeit gold and silver has diverted people to cryptocurrencies where their values are based on cryptography that cannot be counterfeited. Cryptocurrencies like Bitcoin and Dash are playing a huge role in Venezuela for day to day transactions.
Initially when Bitcoin came into existence, it was worth nothing until it started to be used as a means of exchange for goods and services. Though it was mainly used by geeks and eventually on the dark web, the magic that gave it value was the ability to have fast transactions with a peer without permission of a third party like a financial institution. The early videos I watched on Youtube talked about how a people were able to receive a Bitcoin transactions in seconds.
With more adoption came the issue of scaling of the network so it could still do the same thing it did before. With the Bitcoin debate raging, the narrative changed from peer to peer cash transactions to just holding it or “hodling it”. Now the narrative was not entirely erroneous because the case can be made that because of it’s scarcity (there are only 21 Million that will ever exist), it will act like gold which is referred as the king of “store of value.”
Personally, I am still under the notion that Bitcoin would have had more adoption and probably increased in value if it could have scaled as more people adopted and used it for their everyday transactions. The case can be made that a lot of the hundreds of cryptocurrencies on the market probably would not have existed and taken market share from the Bitcoin value if the scaling issue is still not ongoing but I digress.
So how does Telos factor into this. Telos, which will be a fork of the EOSIO software that will be doing what gave Bitcoin it’s magic and value in the first place; fast transactions. Telos will not have only fast transactions, but FREE transactions. Fast and free transactions will definitely produce a lot of value. Telos will not only have these types of transactions, but it will also have a platform for decentralized applications to be built on through smart contracts. Since the network is going to be governed by the Telos token holders, the issues that plagued Bitcoin resulting in all the forks we have today will also be a thing of the past.
Although scarcity definitely plays a role for something to have a store of value, the usability and adoption will play larger roles especially as the world gets more digital. Eventually humans and machines will interact and communicate with each other in ways that even our imaginations cannot fathom. I believe that any cryptocurrency that is able to fulfill most of these needs will be “a store of value.” I think that Telos has a very good chance to be that cryptocurrency or amongst the ones that will have that store of value.
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