If any cryptocurrency is to hold value, it is smart to ask what that value is, what the value is derived from, and whether that value can be sustained over the long term. To answer these questions, we look for analogies in the world we know. We try to compare cryptocurrencies to commodities or to stocks. However, both of these analogies are very misleading and do not help us to answer correctly. Can ADA coins be a store of value? We will try to answer that.
TLDR:
- You don’t have to pay miners to hold gold. Cryptocurrencies depend on the existence of a network, so someone has to pay for security forever.
- The lower the cost of maintaining the network, the easier it is to survive economically in the long term. Is a network with lower operating costs a better store of value?
- When BTC coins are tokenized on Cardano, bitcoiners might be interested in holding ADA.
- The value of the coins will reflect the quality and value of the network. More useful networks will be more valuable.
- The confusion arises because IT professionals see blockchain as a technology while economists see it as money.
This article was prepared by Cardanians with support from Cexplorer.
Read the article: Can ADA be a store of value? | Cardano Explorer