Since Bitcoin made its debut more than nine years ago, economists have continually debated how tokens and cryptocurrencies relate to (and differ from) traditional monetary economics. These economic theories attempt to understand the functions of money as an exchange medium, a store of value, and a unit of account — all of which are regularly debated within the token community. Token economies are critical to healthy, functioning token ecosystems and attempt to ensure the long-term viability of the platforms.
To affirm the Storj community is aptly prepared for the long-term future, our team has partnered with Warren E. Weber, a PhD economist who spent nearly 30 years working for the Federal Reserve Bank of Minneapolis. Warren is an advisor to our board and is currently supporting our efforts to draft our STORJ Token Distribution Plan, which will outline how Storj Labs plans to distribute its 245 million STORJ tokens in the years to come.
Our friend Warren recently released an overview on The Quantity Theory of Money for Tokens, which takes a look at pricing within token economies. In short, Warren feels that to correctly use the Quantity Theory of Money within token economies, it is critical to recognize that the equation explains the token price of the good or service the token can buy. It is not the exchange rate of the token in terms of USD, BTC, or any other currency or token.
While Warren’s article isn’t for the economic faint of heart, it will be interesting to those who have dabbled in economics and will share some background knowledge on what you can expect in the STORJ Token Distribution Plan, which we will release ahead of July 29, when the 245 million STORJ tokens that are locked in a smart contract become available. Most — if not all — of those tokens will go back into smart contracts, set to unlock slowly over time to ensure the health of Storj long-term. Until then, follow Storj on Twitter for the latest updates.
By Matthew May