Oct 30, 2024
We recently announced that we store our profits in Nano. We do this because it is our opinion that Nano has a chance to become the strongest possible store of value, moreso than any fiat currency or other cryptocurrency. In this article, we'll explain the key factors that led to this decision.
Fiat currencies like US Dollars, the Euro, and even moreso weaker currencies like Nigerian Naira and Argentinian Pesos are subject to debasement. To put this in perspective:
In most cases, countries aim for 2% inflation per year. This is a deliberate attempt to devalue the currency over time, a promise by central banks that the value of your currency will decrease by 2% each year or that they will at the very least try to accomplish this.
While currencies like the dollar have a large network effect and are broadly accepted, the debasement inherent in them makes them a poor store of value and therefore a poor choice as a treasury asset.
We see fundamental issues with most cryptocurrencies. While Bitcoin is widely touted as a store of value, it faces two critical challenges:
Security Budget: Bitcoin's declining block rewards create uncertainty about its long-term security model. As rewards decrease relative to market capitalization, either security will diminish or the protocol will need to implement further debasement through a tail emission, compromising its fixed supply narrative.
Centralization Pressure: The economics of Bitcoin mining inherently favor large-scale operations, leading to increasing centralization over time. This threatens Bitcoin's fundamental value proposition of being censorship resistant.
While we've previously laid out why Nano is a great payment network, Nano's store of value properties are possibly more important.
It has a more strongly fixed supply than even Bitcoin. While additional Bitcoin are brought into circulation every 10 minutes to reward miners for securing the network, no additional Nano can ever be created. The originally created 133 million Nano are all there ever will be.
More importantly, Nano is decentralized both now and in the future. Unlike Bitcoin where power centralizes into ever fewer hands, the opposite holds true in Nano. Every individual and business that holds Nano would like the network to be secure, because this increases the value of their own holdings.
Confirming transactions on the Nano network requires approval by a vote-weighted majority of nodes (a PC or server running Nano validation software) on the network. 1 Nano equals 1 vote, and anyone holding Nano can vote for any node or change the node they're voting for at any time. As every holder wants the network to be decentralized and secure, every holder is incentivized to remove their votes from nodes with high voting weight and to vote for nodes with low voting weight. This leads to a decentralized network because everyone's interests are aligned.
Because of debasement and inflation we prefer to not store our value in currencies like the US Dollar, Euro or any other printable currency. Questionable long-term security and centralization issues mean that we do not see a long-term future for most other cryptocurrencies, including for Bitcoin.
Given Nano's fixed supply and decentralization, both now and into the future, we believe it has the chance to become the best store of value. That it's also a fantastic way to take payments is a nice bonus.
To those that want to learn about Nano we would suggest reading an article on the basics of how it works. Alternatively we would suggest downloading a wallet like Natrium (Android, iOS) and getting some Nano from NanoDrop to try it out with. It's all free. If you'd like to get your hands on some Nano to use with us you can find exchanges on the Nano Hub or find ways to earn small amounts of Nano here.
To merchants considering accepting Nano for payments, NanoPay is an easy all-in-one solution.
We're personally enthusiastic about Nano and are always open to chat about it in our Discord server or via our support email.
