Cryptocurrency, for all of its recent successes in attracting mainstream investors and the curiosity of laypeople, has yet to be used as money on any significant scale. This seems to be problematic for a technology that literally has the word “currency” in its name.
Indeed, many people doubt that cryptocurrency will ever be able to truly call itself money – particularly Bitcoin – the first ever cryptocurrency that was created by Satoshi Nakamoto in 2008 with the purpose of becoming a major global currency one day. Ten years later, and this vision has yet to materialize – for a variety of different reasons.
Enter Minexcoin: a Blockchain Project Looking to Make Crypto “Real Money”
The Ukrainian blockchain-based startup is currently in the process of designing an entire ecosystem that revolves around the idea of creating a low-volatility cryptocurrency. This way, it hopes to get rid of a major friction point in the outward adoption of crypto.
It hopes to have a self-regulating mechanism in place, that will moderate any price swings, making it a less risky investment, and allowing users to be more certain of its value on day-to-day basis.
Furthermore, the project is employing atomic swaps in its crypto model, which will, if successful, allow people to directly trade the currency to other people without having to rely on traditional exchanges like Coinbase and Binance. Recently, the company boasted about its successful atomic swap test, saying that it would soon become the first to bring it beyond an experimental testing stage.
The Four Function Development Strategy
Now, Minexcoin is implementing what it’s calling “four function development strategy,” which involves introducing a set of features that it has set as criteria for what it calls real money. These features include: equivalent value, means of payment, means of circulation, and means of saving and accumulation.
According to the company, for any asset to become a full-fledged money, it must completely satisfy this criteria and the more of these functions it takes on, the more it becomes a “real money.”
The first condition, money as a means of saving and accumulation, is basically saying that money must be a good way to preserve a person’s wealth and the value of their savings. You may know this quality by another name, something economists call a “store of value.”
In the MNX system, a product called Minexbank (or an autonomous algorithm for smoothing the volatility) is responsible for preserving the token’s value.
The second condition, equivalent of value, allows users to measure the value of things by a common denominator – by the currency itself, and the monetary units its denominated in. This is yet another standard condition recognized by most economists for something to be considered money.
The other two qualities, means of payment and means of circulation, are fairly self-explanatory. Money must be widely accepted as a payment for goods and services, thus it must be considered a medium of exchange that is circulated across different markets.
If you have these qualities in a cryptocurrency, then, according Minexcoin, what you really have is money.