The best of both worlds: Gold and crypto
Cryptocurrency and blockchain technology have presented a unique opportunity to change the manner in which the world transacts. What makes money successful and sustainable is the degree to which it is an efficient medium of exchange between two parties as well as a stable store of value.
This definition is supported through the economic principal of Gresham’s law which defines the concept “bad money drives out good”, which suggests when dealing with two currencies, individuals are likely to spend the currency they deem less valuable adopting a pattern of ‘hoarding’ for that which is deemed more valuable.
This can be observed within the crypto sphere as volatile markets cause individuals to react similarly as they hold cryptocurrencies in hope for positive growth. Gold has been valued by civilizations all around the world for thousands of years, maintaining its status over time as the most effective store of value the world has ever seen.
Gold and crypto are both stores of value, however unlike major cryptocurrencies gold is a stable, where crypto is not. Crypto is a fairly efficient means of exchange, unfortunately it can be slow, expensive and of course with the wild volatility, people choose to hold more often than spend. A system which is able to bring together the pros of both gold and crypto, whilst minimising the negative consequences just like the Kinesis Monetary System can revolutionise the money as we know it.
Cryptocurrencies, such as Bitcoin and Ethereum are systems whose value is based on the digital supply of these currencies; Attempt to replace the current fiat-based system with a digital currency, however both lack intrinsic value.
Precious metals ensure a stable store of value, whilst maintaining the security, transparency and integrity of the blockchain. Before we find out whether or not that is the case, we remain spectators of a race to find the winner who is able to best utilise blockchain technology to solve the problems of today. We do encourage those interested to investigate how Kinesis Money is achieving this monumental task.