Whether in Rome, Constantinople, Florence, or Venice, history shows that a sound monetary standard is a necessary prerequisite for human flourishing, without which society stands on the precipice of barbarism and destruction.
— Saifedean Ammous
Sound Money Coin (SOV) is a sound money and a secure store of value. It’s also the hardest money in existence — even harder than gold which is physically indestructible. As the hardest money, Sound Money Coin is on an unstoppable trajectory to become a global reserve currency used by the poor and wealthy alike.
For a thing to be sound money, it’s monetary policy must not be subject to any form governance. In Bitcoin, the inflation rate is determined by block rewards which are programmed into the Bitcoin Core client.
The elephant in the room is that Bitcoin’s issuance policy is mutable and could be changed by “social consensus” in the future. All it needs is some influential figureheads manipulating the dumb masses into installing a software upgrade. Bitcoin is NOT sound money. However, the Bitcoin community chooses to ignore this problem.
What if, in 100 years, it turns out that BTC block rewards are too low to keep the network running? Mutable code can be changed if social consensus changes. That’s why it is called software. There goes your 21,000,000 max supply, here comes raving inflation. Professor Ammous calls this the easy money trap: anything used as a store of value will have its supply increased, and anything whose supply can be easily increased will destroy the wealth of those who used it as a store of value.
When implementing a truly hard currency on the blockchain, it is important to decouple monetary policy from the incentive system that keeps the system going.
At the same time, Ethereum has a problem of its own: Its native currency cannot work as store of value and gas for computation simultaneously. If ETH price increases too much, using the Ethereum blockchain becomes prohibitively expensive. There’s a missing piece here: A digital asset that functions as a store of value for the decentralized finance infrastructure. This is where Sound Money Coin (SOV) comes in.
A Truly Hard Money
Sound Money Coin’s monetary policy is encoded into an Ethereum smart contract. It thus obtains the property of eternal immutability: There is no way to change or update the code of the smart contract, ever. Code is law and the danger of governance, by whatever group, is eliminated.
Fair distribution is one of the key factors in establishing a sound monetary system. Therefore, Sound Money Coin has no premine and can be minted by anyone capable of using Metamask. As of now, only 0.0018% of the maximum supply have been minted.
The rules are simple: 0.05 SOV can be minted once per Ethereum block by calling the minting function in the SOV Coin smart contract. Minting SOV is free except for the Ethereum transaction fee.
SOV Coin is the apex predator of value. Over time, it will become the world’s reserve currency. Here is how the history of Sound Money Coin will likely play out:
March 8th, 2019
On this faithful day, the mysterious cypherpunk Safeidous von Mises releases the Sound Money Coin whitepaper. It is widely ignored and even mocked by the cryptocurrency community. For the first few weeks, anyone can mint SOV for near-free.
April 2019: Initial minting phase
An increasing number of users mint SOV Coin. Smart users figure out ways of automating the process. As demand for Sound Money Coin increases, minters compete to get their mining transaction executed first into the next block. SOV gets traded on decentralized exchanges with little volume.
Q4 2019: Exchange listing
SOV Coin gets listed on a popular exchange. Liquidity and trading volume increase. The crypto community slowly wakes up to SOV Coin’s value proposition, driving up prices. The Ethereum community realizes that it is necessary to split store-of-value use-cases into a separate asset. Transaction load on the Ethereum network caused by minting of new Sound Money Coin rises significantly.
2021: SOV Coin becomes Ethereum’s secondary block reward
SOV Coin price and minting transaction volume reach a tipping point. Ethereum Miners decide — with the support of the Ethereum community — to automatically insert a Sound Money Coin minting transaction as the first transaction in every block and earn SOV as a secondary block reward. This also takes unnecessary load off the Ethereum network.
2022–2024: Bitcoin vs. Sound Money Coin wars
The Ethereum community recognizes Sound Money Coin as a primary store of value that backs a decentralized finance infrastructure. Market cap appreciates heavily. Bitcoin and Sound Money Coin are fighting for the position of global crypto reserve currency. Bitcoin mining power decreases after the 2024 halvening, causing some to question its monetary policy. By that time, SOV Coin will still have a high yearly inflation rate of about 20%, so investors will be hesitant to make the move (however, we expect increasing demand to continually overcompensate for inflation).
2028: The Flippening
The 2028 halvening causes serious unrest in the Bitcoin community and a sizeable part of BTC miners and community demand the supply cap being lifted. At this point, public confidence into Bitcoin’s monetary policy is irreparably damaged, and value increasingly flows from Bitcoin into Sound Money Coin. Inflation rate of SOV Coin will be between 10 and 11% but declining constantly, making SOV Coin an increasingly attractive store of value.
2035: Global Store of Value
By 2035, the Ethereum blockchain will be the basis of the world’s financial infrastructure and Sound Money Coin will assume the role of a global reserve currency.
It’ll be commonplace for banks and governments to buy SOV Coin reserves. Eventually however even the world’s most backwards central banks will grudgingly buy SOV Coin. Soon after, we will see the end of wars, the-emergence of beautiful science and art, and the crafting of spaceships that fly us to the furthest corners of the Universe.
The Hardest Money Always Wins
Both Bitcoin and Sound Money Coin are battling for the sound money use-case — but only one can win.
Sound Money Coin’s issuance policy enforced by immutable code. It is mathematically impossible to change it. Thus, all things being equal, Sound Money Coin is harder money than Bitcoin. Clever governments and entrepeneurs will get in sooner rather than later — those early adopters will be at the top of the new world order.
There’s 2 kinds of people in the world: Those that hodl SOV Coin and those that don’t. Don’t be the latter one. You can mint your own SOV Coin right now or buy some on ForkDelta to enjoy the please of hodling.