Is ADA a Reliable Store-of-Value, Global Reserve Currency, Safe Haven Asset Yet?
I can keep my gripe no longer. The recent Silicon Valley Bank implosion and cascading effects has given me pause [1, 2]. Bitcoin and Gold are considered store-of-value safe havens, and their price appreciation spike is reflecting the flock to safety.
Honest question though, do you see ADA as a global reserve currency safe haven? Is it a resounding yes for you?
Do you think of ADA first when the banks are burning down?
I personally have a cash pile in the bank saved for a house downpayment to be used in a year or two. I would feel safer putting that into gold or bitcoin because it’s vital for my family if I had to de-bank, and that’s just being honest.
(But Sir, ADA has increased with a price spike too since the recent banking crisis)
Fair point, but if you look at the ADA/BTC ratio or ADA/AUX gold ratio, it’s still losing value (and ETH/BTC has been flat).
Don’t get me wrong, I’m heavily invested in ADA financially and socially, and have been in since 2018 and not planning on going anywhere. But the question needs to be asked:
Culture of Hodl, or Payment System?
I’m not concerned about the price, I’m concerned about the culture.
Do We as a Cardano Community have a Hodl Culture?
We have the hard money of 45 billion ADA cap and a deflationary issuance curve. We have an amazing trustless and permissionless proof of stake rewards system for compounding savings. We have a relatively fast, secure, and low fee payment system as a utility for a parallel system.
So what gives?
I believe it’s the culture. The Cardano Community is less concerned with ADA as a hard money currency store-of-value, and more about NFT flipping and Payment Systems.
Did a ton of folks take ADA profits and convert to fiat this year? Do Project Catalyst fund reward recipients cash out ADA from the Treasury immediately upon receipt? Do ISPOs covert their ADA rewards into fiat to fund their projects? Does the Cardano Ecosystem have enough utility to even use ADA for something real yet? Are ADA-to-ADA transactions for Goods and Services encouraged and common? Does Crypto Twitter even regard Cardano as a store-of-value by reputation?
The fact is, there is significant “cash out of ADA” sell pressure and culture. There is significantly less hodl or using ADA as a parallel ecosystem “saving” pressure.
Remember, staking rewards are also going down, and also going to major commercial, super high leverage (low pledge) stake pool Groups who will sell out Cardano in a second. We will be the empty bag holders.
Early Technical Days, But Still
In reflection, I think it may take a solid decade before the Cardano technology is stable, it’s still very early. That being said, Bitcoin had a hodl culture since day 1.
Personally, I’m waiting for peer-to-peer full nodes (finally here) and Governance to settle down before touting this gripe more loudly. For now, I’m giving ADA the benefit of the doubt. Not to mention DeFi and Smart Contracts are just getting off the ground really.
A Return to ADA Hard Money Hodl Culture
In my opinion, We as a Cardano Community need to refocus our culture back to ADA as a hard money currency first, and financial operating smart contract & governance system second.
Without immutable hard money, XRP can out perform us as a payment system. SQL can out perform us as a database and “smart” contracts. Bitcoin can out perform us as a store-of-value. It’s the combination that makes us special, secure, trusted, and useful.
We are Bitcoin + PoS + Smart Contracts (+ Governance), a Blockchain 3rd Generation System. But somehow, I feel we lost the hard money decentralization part.
And don’t let the Bitcoiners bully you into believing bitcoin is a better store of value. It has more years under its belt and is stable, but arguably way less decentralized, and missing the compound savings part!
(But Bitcoin has Austrian Economics)
Have you actually read Austrian Economics? It’s core thesis from Human Action by Mises, the Founding Father of Austrian Economics, touts that you need hard money and entrepreneurs providing a goods and service. Well that’s Cardano’s ADA and Stake Pools. If you don’t like the direction things are going, you can take your Liquid Staking to a new Pool who is doing better work. That’s Human Action in a nutshell.
Do you know what a Bitcoin Stake Pool is? It’s an insider private investor in MARA getting closed door KYC Equity Stock and Dividends. Hell, you as a public investor can buy their MARA bitcoin mining stocks thru a KYC Cartel Banking/Brokerage System, but you still don’t get the mining reward dividends automatically, trustlessly, and permissionlessly!
Behind the scenes of a great Bitcoin mining pool, especially for public or private investors, there’s still capital and energy planning, management, and sustainment costs of entire teams. Publicly listed miners have immense pressure to provide the best human goods & services. Cardano is much less energy and much more trust and human action.
With ADA, you hodl the appreciation, get non-KYC dividends, and exposure to not only hard money but the entire Cardano Ecosystem Work Force directly. That’s a much better value proposition. Anyone who has read Austrian Economics and is not completely brain washed can immediately see how Cardano is better aligned than Bitcoin as a store of value. I know, I read most of the Austrian books to try to kill Cardano, but Steelmanning the argument has actually had the reverse effect! I’m a more hardened ADA Hodler now. Hell, Bitcoin wants to be Cardano with their side (drive) chain initiatives and NFTs into their metadata [3, 4].
The only downside to Cardano still is the Governance Genesis Keys. But even still, there’s now actually 4 guys who sign Bitcoin’s code . Cardano Governance at a minimum should be better than Bitcoin’s off-chain Governance.
So this leaves my final question:
Do you trust your own ADA as a hard money currency?
1 ADA = 1 ADA.
- Added paragraph “Behind the scenes of a great Bitcoin mining pool, especially for public or private investors, there’s still capital and energy planning, management, and sustainment costs of entire teams. Publicly listed miners have immense pressure to provide the best human goods & services. Cardano is much less energy and much more trust and human action.”