Standards of economic value are entities upon which the cost of a transaction is agreed upon across different demographics. Standards of value are universal if they can determine the worth of a commodity or transaction worldwide.
Usually, a universal standard of value provides cost-worth to other commodities, and sometimes lesser standards of value can be quantified as fractions of the universal standard of value. Centuries back, standards of value were based on a widely known commodity such as gold, silver, or bronze. Presently, standards of value are based on currencies and are distributed globally as floating exchange rates.
Jax.Network is a universal payment system where users can transfer value in a decentralized chain. This value is transferred in the form of the blockchain native token – JAX. Let’s look at what qualifies a security/commodity/asset to be a universal store of value and why we think JAX is one.
What are the criteria for a “universal store of value”?
A commodity with the highest salability is regarded as the best store of value. Salability means the simplicity of transferring value from one market to another at any time without incurring any losses. Goods salability is often determined in three dimensions of time, scale, and space.
For example, JAX is easily divisible into smaller units and subunits depending on the designated value that one seeks to transfer. This divisibility makes it possible for transaction participants to quantify a trade-in value, whatever size they desire. We can therefore say, JAX has high salability across scales.
The next dimension defines the ease of transporting, transferring, or distributing value from one geographical location to another. JAX can be transferred from a trader in Denmark to a merchant in the USA through the Jax.Network blockchain ecosystem. Therefore, we can say JAX has high salability across space.
Finally, the third dimension is the salability of time. It describes a universal standard of value that can be transferred from one entity to another at any time, holds reliable value in a future time, remains stable and bulletproof from counterfeiting, corrosion, rot, and high volatility. Time salability also ascertains a standard of value that must never be subject to any unpredictable surges in supply.
How JAX qualifies in the above criterion as a universal store of value:
First, the supply of JAX is tied to a cost-based mechanism to satisfy the salability of time. For example, money is mainly backed by governmental entities that ensure trust across its users.
On the other hand, JAX is backed by the efficiency of GPU and ASIC equipment. Excessive money printing by central banks can break trust by spurring inflation.
Similarly, if the ASIC and GPU technology improves and efficiency increases, the value of JAX is likely to drop. The issuance of too many coins results from mining efficiency and will always have a downward effect on the price of a digital currency. To ensure this doesn’t occur, a K-coefficient is introduced in the network that adjusts the cost of production so that it remains stable over time.
Further, the supply of more coins is based on whether miners can allocate extra computing power to the shards or not. The miners need to have the computing resources to sustain a new shard, making the mining and creation of new coins relatively responsible by ensuring that coin issuance is market-driven. If there is no new demand for JAX coins, miners have no incentives to mint them. .
Besides, JAX is divisible into convenient units that can quantify the proper value of a commodity. And finally, Jax.Network is fast and reliable to transfer JAX coins across time and space, lowering the transaction cost without losses.