Money creation and the potential impact for the value of JaxCoins

1. Money creation and the potential impact on the value of JAX coins jax.network

2. A rise in the amount of money in circulation is only necessary when there is an increase in productivity gains at par with the new amount injected into the economy. Similarly, the value of the fat currency decreases if the aforementioned conditions are not met. jax.network

3. Before infation, a fat currency had more value. In some countries where populations sufer from hyperinfation (e.g. Venezuela, Argentina), people tend to invest in cryptocurrencies such as Bitcoin. However, most well-known cryptocurrencies are highly volatile and are not really ft for day-to-day payments. Users then turn to what is known as stablecoins. These cryptocurrencies are pegged, mostly, to the USD. Most of them are centralized and people sufering from high infation still have problems using them as they lose purchasing power. jax.network

4. The value of JAX coins relative to transactional value One way to tackle these issues is to measure economic value diferently. The only reliable data accessible and verifable is, in Proof-of-Work networks, hashrate, or the computing power allocated at a certain time on the network. Jax.Network uses the Bitcoin hashrate to peg the value of its coin. Thanks to a unique reward function, JAX coin issuance is proportional to the hashrate of all miners mining the shards. This way, printing always follows the computing power on the network at any given time. However, with this time of reward, coin issuance could grow too high and infate JAX coins. jax.network

5. Burning coins, a strategy that permanently removes coins from circulation, can help prevent infation for cryptocurrency while maintaining its value. Issuing JAX helps to control their supply which ultimately stops infation. From an economic point of view, we have internalized the opportunity cost of mining other cryptocurrencies. Miners can now choose what is most proftable. jax.network

6. When the price of JAX rises, miners will increase their hash rate, mint more coins, and distribute them accordingly. If there is no demand for JAX coins, miners will just verify transactions on the network and earn transaction fees but will mine only BTC + JXN. Therefore, no new JAX will circulate. Jax.Network just automated the issuance of stablecoins. jax.network

7. The value of JAX coins is measured in units of hash power and not in fat. This means the value of JAX coins gets measured based on transactions intrinsic to the decentralized network, which is tied to the cost of computing power allocated to mine one Bitcoin block. JAX, a stablecoin of Jax.Network, is superior to existing stablecoins because it maintains decentralization and does not need to be pegged to assets or fat currencies to maintain its value. jax.network

8. Conclusion JAX coins maintain their stored value even if a fat currency loses value. This stored value protects JAX holders from losing their purchasing power in the event of infation of a fat currency. The stability of JAX coins is maintained by controlling the issuance of the coins over Jax.Network. jax.network

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