Historically, currencies like the US Dollar, Euro, and the Japanese Yen have long been, and still are classified by economists to assess and manage currency risk. Currency classification, a term adopted by economists of all economic trains of thought to determine the soundness of traditional fiat currencies falls under three categories:

⦁ Hard Currency: A currency issued by a politically and economically stable country with minimal value fluctuation
⦁ Soft Currency: A less stable currency that is prone to fluctuate in value
⦁ Junk Currency: A highly unstable, often rapidly depreciating, untrusted medium of exchange

Applying Currency Classifications to Digital Assets

With the widespread acceptance of cryptocurrencies as an alternative medium of exchange as compared to traditional fiat currency, currency classifications can now be applied to digital assets. A hard currency is generally defined by the following criteria:

⦁ It must be globally traded, recognized, and accepted as a store of value.
⦁ The issuing entity is seen as politically and economically stable.
⦁ It is trusted to either retain its value or appreciate against softer currencies.
⦁ It enjoys widespread acceptance as a medium of exchange for goods and services internationally.

For digital currencies, the same principles apply, but with several unique considerations. Instead of being issued by governments, cryptocurrencies like Pirate Chain are decentralized, relegating trust from central banks and planners who are prone to human error, to trusting cryptography.

Pirate Chain as a Hard Currency

Pirate Chain ($ARRR) demonstrates characteristics that align with the definition of hard money:

⦁ Inflation and Supply: Pirate Chain’s inflation is controlled by a capped supply of 200 million coins, with a halving mechanism that reduces the rate of new coin issuance every 270 days, with the next halving occurring around September 28, 2024 reducing the block reward from 2 ARRR to 1 ARRR per block mined. This halving would mean that the annualized supply inflation of Pirate Chain will be reduced from 0.52% to 0.26%. For reference the Federal Reserve aims to keep the U.S. Dollar’s yearly inflation at 2%, while Bitcoin is at 0.85% (halved every 4 years, with the next halving set to occur in 2028). This deflationary model echoes the principles of sound currency as per the Austrian School of Economics monetary theory, where increased scarcity plays a crucial role for value appreciation over time, which is why Pirate has a better Stock-To-Flow ratio than Bitcoin and the U.S. Dollar, therefore more favorable economics.

⦁ Cryptographic Stability: Unlike fiat currencies that are managed by governments prone to political and economic instability, Pirate Chain is secured by Zero Knowledge Succinct Non-Interactive Arguments of Knowledge (zk-SNARKs) cryptography, which is based on mathematical certainty, and is considered by many cryptographic experts to be the strongest privacy enhancing cryptographic protocol to exist today. Math is not influenced by human emotions like greed or fear, making Pirate Chain resistant to manipulative forces often present in traditional financial systems. Additionally, Pirate Chain was announced on August 29, 2018 on the BitcoinTalk Forum for distribution with no dev tax or premine and is maintained by a global team of contributors and volunteers.

⦁ International Acceptance and Trust: While still in its early stages compared to major fiat currencies, Pirate Chain is gaining traction as a cryptocurrency with many merchants around the world accepting ARRR as payment, many of which can be found on the ARRRmada website. Due to their nature as relatively new currencies with growing levels of adoption, cryptocurrencies are considered to be extremely volatile as compared to Fiat currencies such as the U.S. Dollar. However, unlike almost all other cryptocurrencies, Pirate Chain is not a speculative asset/currency, instead it is a utility based currency acting as the world most private medium of exchange, where price stability against a currency like the U.S. Dollar is not to be expected any time soon, at least not until we reach mass adoption or hyperpiratechainization, in the meantime leaving massive room for value appreciation against softer currencies.

⦁ Durability, Fungibility, and Divisibility: Pirate Chain possesses the key attributes of money that any hard currency must have. It is durable, highly fungible (with private transactions that ensure one unit of ARRR is always equal to another), portable (being digital, it can be transferred globally with ease), and divisible (down to eight decimal places). These properties reinforce Pirate Chain's utility as the ideal form of money in the digital age.

Compared to fiat currencies, which are subject to inflationary pressures and central bank manipulation, Pirate Chain offers a private, deflationary, and decentralized alternative. Historically, many fiat currencies have lost value when measured against hard assets like gold, and over the long term, Pirate Chain has the potential to demonstrate similar resilience against fiat devaluation, as evidenced by its ARRR/USD price trends and favorable economic properties.

The Austrian School of Economics on Hard Currency

In contrast to the Keynesian view that emphasizes government control over currency and inflation management, the Austrian School of Economics advocates for a different approach. According to Austrian economists, a hard currency should be based on sound money principles which include scarcity, lack of government interference, and the ability to preserve purchasing power over time. They argue that currency should emerge naturally from the market, based on what individuals voluntarily choose to accept as a medium of exchange.

Pirate Chain fits well into the Austrian definition of hard money. It has a fixed supply, deflationary properties, improving adoption rate, and decentralized nature preventing any central authority from manipulating its value or increasing supply. Furthermore, the use of strong cryptography in the form of zk-SNARKs ensures that transactions remain private and secure, embodying the principle of individual financial sovereignty, an essential tenet of invaluable measure to Austrian economic theory.

In contrast to soft or junk currencies, Pirate Chain is poised to offer a stable, long-term store of value as it matures. As global awareness and adoption grow, ARRR may increasingly be viewed as a form of digital hard currency, a new chapter in the evolution of money, guided by economic principles that champion sound, private, decentralized financial systems over inflation-prone corrupt fiat regimes.