A Store of Value

The 3rd Job-to-be-done with money

A store of value is an asset, currency, or commodity that maintains its value over a long period of time. An item would be considered a store of value if its value is either stable or increases over time but doesn’t depreciate. The conditions upon which an item qualifies to be a store of value depend on whether it can be saved, retrieved, and exchanged while maintaining its purchasing power.

If an item can be held and converted into money in the future without a decrease in value, it is considered a good store of value. Various commodities are considered stores of value by virtue of their divisibility, durability, and portability.

For the better part of history, various commodities played the role of money.

Initially, trade agents used assets and commodities, such as gold, as mediums of exchange based on their intrinsic values, durability, and portability. The functions of money are universal, and its defining property is based on the function it performs, such as purchasing power between traders over time.

In the monetary economy, currency (also known as fiat money) is considered a store of value, where it can be used as a means of saving and allocating capital. Money’s property as a store of value facilitates a transfer of purchasing power over time.

Different types of representation of money come along with digital technology, such as: cryptocurrency, and central bank digital currency. Their features – such as scarcity, divisibility, secure network, and as a holder of transfer of value – make it a good store of value.

More in-depth information and analysis will be discussed in the chapter Timeline of Digital Money.