Jul 16, 2020
Is NGK valuable
Recently, we often heard the question of whether NGK is valuable, but the answers are all superficial that could not present its value. In this article, I will explain the value of NGK that goes far beyond what people understand now and show how NGK becomes a common currency in the NGK digital economy.
Let’s start by exploring the value of NGK.
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What is the basis of NGK value?
NGK is the native currency of the NGK network, which is endowed with value due to various factors. The functions used in NGK networks are:
• GK transaction costs
• Pledge for various open financial products
• Can be borrowed or lent
• Used as payment method for certain retailers and service providers
Furthermore, in NGK networks, as long as participating in the campaign node, the user can be a verifier, to help protect the network. There is also NGK black hole destruction mechanism, in which a certain amount of NGK may be destroyed, thus the flow of NGK will be further reduced.
Besides utility value, NGK also bears speculative value. This value stems from speculative activities (e.g. trading and investment) (which are also currently the main source of value for all blockchain assets). Does the NGK have a surge and slump? The answer is obviously no, the positioning of NGK token ensures its long-term stable value aggregation and will not collapse due to the impact of the environment.
Can other tokens in NGK network replace NGK?
Theoretically yes, while it is no in reality. A concept of using another asset to protect NGK networks is called “economic abstraction “(proofreading: also called “cost generalization”). This also requires that all other NGK holders agree to substitute NGK with other tokens and the possibility of economic abstraction based on NGK agreements is negligible.
How does the value of NGK help protect the entire network?
During the DPOSS consensus mechanism, nodes compete to become block producers, which enjoy block production rewards. As asset prices rise, more nodes will naturally join the block producer campaign. The campaign of block producer will become more difficult, which also leads to other individuals or groups cannot successfully attack or control NGK blockchain network.
What does the NGK network protect?
NGK network currently contains a variety of currencies: NGK (orginal tokens), USDN(algorithmic stablecoin), developer creation Token(other tokens), and so on.
If we expect the financial system of the NGK network to maintain growth and replace the existing system in the future, we must ensure that the NGK network can fully protect the value of these tokens.
NGK DPOSS consensus mechanism assures that even if most block producers go offline (e.g. disasters like the third world war), the protocol can keep working properly. as long as NGK maintains enough high value (to motivate people to continue running the verifier node), this level of activity can be achieved.
Is NGK digital currency?
Historically, many items have been circulated as currency — shells, golden coins, paper money, etc. When an object is to play the role of money in the economy and society, it needs to have three functions: media of exchange（MoE）, unit of account (UoA) and storage of value (SoV). NGK is used as a medium of exchange by many APP in the NGK economy, and many DAPP suppliers accept the exchange of NGK for homogeneous or non-homogeneous tokens or other services. It is also used by the parties as a unit of account. Lastly, given its relative scarcity, predictability and endogenous function of supply growth, NGK has a history of being used to store value — both investors and speculators purchase NGK to meet their investment needs.
An object (whether real or virtual) usually has to have five specific attributes as a reliable currency: portability, durability, separability, interchangeability, and long history (Lindy effect). NGK is highly portable (because it is virtual), durable (or because it is virtual), separable (up to tens of decimal places).
Besides, the NGK also presents some other attributes, such as anti-censorship, zero threshold, quasi-anonymity and interoperability with other blockchain networks.
Conclusion
As shown in this article, the NGK function is far more than the means of payment of online transaction fees. As a result, NGK will accumulate enormous value and begin to produce money-like attributes.
The NGK is expected to continue to be used as the primary digital currency for the NGK open economy, and given the economy continues to grow, so will the demand for NGK.
