INTRODUCTION

Many merchants have been waiting with great anticipation for Block Trade Exchange (BTX) to open and see where the trading and sell limits would settle. These monthly cash sell limits could have an impact on the level of sales and trading that a merchant is prepared to conduct with consumers.

The following discusses the interconnecting relationship between the Utility value in the Qoin wallet and the BTX Buy / Sell price. The discussion draws on early trends from BTX trading. 

THE QOIN CURRENCY

To fully benefit from the power of Qoin we need to recap the Qoin rationale. Qoin is a Global Digital Currency, a subclass of the asset class referred to as Digital Assets. 

The Qoin currency is represented by the value of the goods and services on offer from the merchants in its community. Like other successful currencies, Qoin should be balanced between spending, saving and trading to its maximum potential in its community. 

In the case of the United States Dollar (USD) we know it is the official currency of the USA and is represented by the promises of the USA government and its community. The USD is also the most powerful currency in the world as it has the most usability globally between countries. The reason for this is that it is the most trusted currency. 

You may wonder why the USD is the most trusted. In our opinion there are 5 tangible reasons why the USD is the most trusted currency relative to any other national currency:

  • Stability of the country or community
  • Strong economic growth over time 
  • Efficient monetary and fiscal policies 
  • Governance of the Reserve that issues the currency
  • Respect from others

Therefore, for the Qoin currency to be powerful, the Qoin community must meet the 5 requirements of stability, strong growth of quality merchants, efficient trading policies, good governance, and integrity that will earn respect from others.   

THE FIVE QOIN CORNERSTONES

To ensure the long-term sustainability of the currency, the Qoin protocol has been designed on 5 key cornerstones that interact seamlessly. 

  1. Qoinville Community (the digital world where wallet holders operate as a community)
  2. Qoin Blockchain (the platform on which the currency travels)
  3. Qoin Wallet (the application that transacts and connects to the blockchain)
  4. QShop (the marketplace where Users shop, buy and sell)
  5. BTX (the on and off ramps where Users exchange, buy and sell their Qoin currency)

SUSTAINABLE SUPPLY AND TRADING BY MERCHANTS 

After discussions with BTX management we have learnt the following from the first few weeks of trading:

  • New cash Buyers require a 3 to 5% discount to the utility value in the Qoin wallet
  • Sellers cash out at a 10 to 15% discount to the Buy price 
  • This currently creates a spread of between 13% and 20% between the Qoin wallet value and the BTX cash-out price
  • Please refer to BTX website for current sell limit (subject to buyer demand)

Analysing these numbers lead to important early conclusions for the Qoin community:

  • Buyers are largely respecting the intrinsic utility value of Qoin
  • An immediate benefit of 3 to 5% occurs when a Buyer purchases Qoin to spend or save
  • No instant cash incentive exists for a Buyer to acquire and immediately sell Qoin 
  • Please refer to BTX website for current sell limit (subject to buyer demand)
  • Sellers should carefully analyse their cost of product when earning Qoin before cashing out

Let’s expand on this last point of analysing your cost of earning Qoin. This concept is important for the sustainability of merchants replacing their raw materials to keep supplying the Qoin community with goods and services. 

As we know the wallet value represents the intrinsic utility value of Qoin and it is this value that the community has agreed to exchange their diverse goods and services with each other.

 On the other hand, the BTX Buy and Sell prices are determined by the supply and demand of buyers and sellers of the Qoin currency. 

If the difference between the wallet utility value that the merchant earns and the BTX cash-out sell price is say 20%, then the merchant needs to carefully plan and manage his product replacement and cash-out cycle.

This business planning and management should consider: 

  • the cost of product replacement
  • date of payment for product replacement
  • other purchase opportunities to spend Qoin at the full wallet utility value
  • the growth expectation of Qoin  
  • the recommended level of 25% extra sales from new Qoin customers
  • the taxation benefits of spending vs cashing out

To illustrate the cash-out cycle let’s take three scenarios of a low, medium, and high product replacement cost based on a product sale price of $100.

Low replacement cost of 25%

Qoin revenue from product sale                  $100               

Cash proceeds from BTX (less 20%)             $  80

Cash replacement cost of product               $  25 

                                                                         ______               

Gross cash profit                                              $ 55                

Medium replacement cost of 50%

Qoin revenue from product sale                  $100               

Cash proceeds from BTX (less 20%)             $  80

Cash replacement cost of product               $  50 

                                                                         ______               

Gross cash profit                                             $  30                

High replacement cost of 75%

Qoin revenue from product sale                  $100               

Cash proceeds from BTX (less 20%)             $  80

Cash replacement cost of product               $  75 

                                                                         ______               

Gross cash profit                                             $    5                

We need to consider that these scenarios are based on immediate cashing out and ignore the considerable benefits of:

  • delayed cash out at a potentially higher price, and or
  • spending Qoin at the higher wallet utility value on essential business goods or services, thereby conserving more cash in your business for product replacement.

CONCLUSION

From the above analysis, we can conclude that most businesses, even with high product replacement costs, can continuously replenish their inventories up to the recommended 25% of extra sales volumes from new Qoin customers. Qoin merchants can therefore supply the community on a sustainable basis and importantly attract new customers.