Economics has not changed much since its invention a couple centuries ago.
But our tweaks and understanding of it has, we have incorporated science and technology to it. But the laws of physics are the same no matter if we are able to fly in the sky or travel to the moon. So is the laws of trade and exchange, and ergo economics.
What we want is " Store of Value". That is what seprates rich from poor, and wealthy from rich.
That is what makes kings and queens and stop peasants from being rich. Store of value is often mistaken for fancy cars and bling. Just go on YouTube and you get the wrong idea
If something you value does not pass this simple litmus test its not a store of value.
If you turned around after two weeks and sold what you bought back, would you get more, or less, or the same? If you get less, its not a good store of value.
" A store of value is a function of an asset that can be saved, retrieved and exchanged at a later time, and be predictably useful when retrievied. More generally something that retains its purchasing power in the future. The most common stores of value in modern times have been, money, commodities, or gems and precious metal."- Wikipedia
I also read that money is considered both a store of value and not, depending on inflation. There are two schools, one consideres money as a store of value, thanks to its function as a intermediary of exchange, and one that say money derives its value from its demand. So the dollar would be a store of value and the British Pound, but not say the Malawi Kwacha. Not enough demand for Kwacha in the world. Now what about Cryptocurrency ? Stocks ?
Stocks are not seen traditionally as a store of value but bonds are. Just like land can be store of value and not according to me and following the money principle. Land thats located in Cartell occupied Mexico or in a unstable African country, is hard to prove recordable legal ownership of. So although the land appreciates and holds same value. It is a bad store of value due to its difficulty to claim.
Just as money that loses value due to inflation is. Why hold on to money that you can get less purchasing power for day by day ?
Stocks are also considered according to economics a bad store of value. The rise and go down, they are called speculative. Growth stocks especially, they go up and down. They ride the wave of Youtube and finacial Guru podcasts. And when they crash people go down with them. Its true one needs to take risks and I do, but as a store of value? There is a entire philosophy called value investing, that Buffet follows that I now am starting to understand. He is about creating wealth it seems and creating wealth is much more about holding on, than experiments.
So what about Crypto currencies ? This young indistry is the epitome of speculative assets. Its new and fresh and a grab for all. Out of this I can only recommend in my opinion a couple of Cryptocurrencies that are fighting for a position as a store of value.
- Bitcoin- Off course the number one Cryptocurrency has rebranded itself many times. And I love this new rebranding, I don't care what anyone else says or how many " fake forks" there is, Bitcoin as a store of value is amazing. Thats what you want. Something that is no longer speculative or seen as cash. But something of value. I mean generation value. Create kings and queens type value. Paintings, land and art has store of value wealth. Imagine Bitcoin up there. It’s better than money.
2 .Ethereum- What else? It´s not a solid pick I admit, but just like land. I feel that claiming ones digital real estate plot in the new staking feature, will be worth something in the new internet. If blockchain is a world computer, Eth is the gasoline. And staking will be ones stations.
- Pax Gold, Uphold Gold, Tokenised Real estate- This here is a batch or lumped together crypto section. Its basically tokenised versions of sure bets and long term stores of value. Not anything new and most run on the Ethereum chain. This is also the section where I feel a upstart or ursurper cryptocurrency might make a stake. By having a more efficient way to tokenise stocks, bonds or real estate. There you have it.
Wealth and value. As I am getting more self educated about the world of money and wealth. I see so much of misconceptions about power wealth and being able to change stuff. What seperates the west from poor countries, is a fundemental misunderstanding of what value is. And wealth creation, everyone knows what rich looks like and can see that, not many people understand what wealth is .Rich thinks in terms of years, wealth thinks in terms of decades.
What crypto do you believe will be stores of value ?