§3. First Principles: What a Store of Value Must Survive

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Jason St George. "§3. First Principles: What a Store of Value Must Survive" in Next‑Gen Store of Value: Privacy, Proofs, Compute. Version v1.0. /v/1.0/read/part-i/3-first-principles/

§3. First principles: what a SoV must survive

A credible store of value must endure time, space, and politics. In practice, that means:

Credible scarcity: issuance cannot be tweaked at will.
Cheap, public verification: authenticity is verifiable by anyone, not decided by a platform.
Censorship‑resistance & portability: no chokepoints; global movement by default.
Neutrality & permissionlessness: open access; rules apply equally.
Native demand: the asset does something indispensable, beyond serving as a symbol.
Lawful privacy by design: default privacy with optional disclosure (viewing keys, auditable receipts) so regulated actors can comply without re‑introducing custodians or surveillance chokepoints.
Duration‑neutrality: no fixed nominal cash flows to peg. A repression‑resistant SoV cannot be a duration instrument whose real return can be driven persistently negative or whose price can be easily mass‑managed by policy. Value should come from scarce capacity purchased every cycle, not from a promised coupon.

Each of these conditions is just the “money as memory” idea made operational: if money is the record of who did work and who is owed work, then scarcity, verifiability, censorship‑resistance, neutrality, native demand, lawful privacy, and duration‑neutrality are the properties that keep that record honest across time, space, and politics.

Thesis: Privacy, Proofs, and Compute can be engineered to meet all seven, and the world now needs exactly those properties.

We can sketch how the triad maps to SoV requirements:

Credible scarcity → issuance schedules and realized issuance vs. schedule for triad assets and Work Credits.
Cheap, public verification → VerifyPrice(W) dashboards for canonical workloads (W).
Censorship‑resistance & portability → VerifyReach + VerifySettle metrics: reachability under censorship and settlement success/refund safety across corridors.
Neutrality & permissionlessness → decentralization telemetry: house share, geo/ASN distribution, time‑to‑first‑proof.
Native demand → Work Credit utilization, proof/compute fee share of the security budget, and application‑level usage.
Lawful privacy → corridor compliance receipts, viewing‑key usage, anonymity‑set health (shielded‑pool size, churn, volume).
Duration‑neutrality → no fixed coupons; revenues from priced workloads and triad usage, with explicit “repression beta” rather than fixed‑income‑like promises.

Table 1: Store‑of‑Value Requirements vs. Triad Capabilities

SoV Requirement	Privacy (P)	Proofs (Pr)	Compute (C)	Metrics / SLOs
Credible scarcity	Shielded balances; no selective debasement; predictable issuance schedules (e.g. halvings).	Auditable supply / reserves without doxxing; proof capacity ultimately tied to hardware and energy costs.	Verified FLOPs limited by physical compute; energy‑ and capacity‑tied useful‑work issuance.	FERs; facility and capacity telemetry; VerifyPrice(W).
Cheap, public verification	Privacy proofs verifiable by anyone; private paths (mixnets, Tor, etc.) for ordinary users.	Succinct, cheap‑to‑check proofs; VerifyPrice targets such as $p95 \leq 5$ s and $r(W) \leq 0.3$ .	Bounded verify cost for heavy workloads; MatMul verification $O(n^2)$ vs. $O(n^3)$ production.	$\textit{VerifyPrice(W)}$ ; $\textit{VerifyReach(N, R)}$ .
Censorship‑resistance	Non‑custodial atomic swaps and shielded pools; harder for censors to see which flows to block.	Receipts portable across chains and platforms; proofs of inclusion, exclusion, and liveness expose filtering.	Open‑admission prover/miner markets; diverse operators and venues for work and settlement.	$\textit{VerifyReach}(N, R)$ ; $\textit{VerifySettle}(C)$ .
Neutrality / permissionlessness	Privacy by default, not by permission; same privacy for all; no privileged view keys.	Anyone can verify; open circuits and PIDL interfaces; no platform or auditor gatekeepers.	Useful‑work mining with open hardware paths; open hardware profiles; no single vendor choke‑point.	Regional VerifyPrice; operator and facility dispersion metrics.
Native demand	Enterprises and individuals need privacy for operations, payments, and savings.	Provenance and compliance mandates; proofs demanded by AI, finance, and regulators.	AI workloads, ZK proving, and related compute as budget line items; budgeted useful compute for AI and crypto systems.	Fee volume from real workloads; Work Credit utilization.
Lawful privacy	Viewing keys and auditable receipts; default‑private rails with narrow, explicit exceptions.	Proof anchors satisfy audits; policy‑aware proofs that reveal facts, not full underlying data.	Compute SLAs with receipts; policy‑tagged workloads and regions for compliant compute.	Share of flows with policy and jurisdiction tags; stress‑test results over policy shocks.
Duration‑neutrality	No fixed coupon; revenues track priced capacity; survives regime and platform change without rotation.	Proof unit pricing floats with budgets; long‑run telemetry rather than single rating‑agency promises.	Verified FLOPs clear at market rates, not pegs; anchored in long‑lived energy and infrastructure, not hype cycles.	Multi‑year FER and SLO stability; long‑run fee and burn coverage.

In a world that will likely choose stealth default (negative real yields and capital controls) over explicit default, “store of value” can’t just be a narrative; it has to clear visible, adversarial stress tests. If the whole point of the stack is to survive yield‑curve control, on‑/off‑ramp throttling, and peg breaks, then we should write down the conditions under which it continues to function and accrue value.

The checklist below turns those claims into operator SLOs that treasuries and allocators can actually underwrite and monitor. Here are several repression stress‑tests to keep in mind:

YCC shock. 24–36 months of −300 to −500 bps real yields → fee+burn share of the security budget remains ≥ a target threshold (e.g., 40–60%) and VerifyPrice (p95) remains < 5s for core workloads.
On‑/off‑ramp squeeze. Non‑custodial BTC↔XMR/ZEC routes maintain ≥95% success with 100% safe refunds; shielded‑pool anonymity sets remain large and growing (no collapse in active notes or volume).
Peg break. If global yields gap +300 bps, triad revenues (proofs/FLOPs, privacy rails usage) track buyer budgets; there are no coupon‑like revenue shortfalls that turn the asset into a synthetic bond.

Publish these in dashboards; no dashboards, no trust. Later sections turn these stress tests into explicit SLAs and telemetry: VerifyPrice, reachability, settlement success, and decentralization metrics that operators and allocators can track in the open.

With these seven requirements as design constraints, we can now turn to the primitives that might satisfy them. Before naming those primitives, however, we need to be explicit about who will attack this system and at what layers. The next section states that threat model; the one after lays out the layered architecture that the rest of the thesis will fill in. The entire document can be read as an attempt to engineer Privacy, Proofs, and Compute to satisfy this seven‑point contract under adversarial conditions.

We can summarize the whole design posture in one line: our North Star is to pay the machine only for work anyone can verify cheaply, on rails that give humans lawful privacy by default.

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