How do you think digital currency gets its value?

I was recently pondering over this question – how a digital currency gets its value. Who decides the value of the digital currency? I actually don’t know the same about real currency as well, but I do have an idea about it. But digital is what I didn’t understand a bit. So I looked around and gathered some information for other people who might be going wondering about the same. 

The answer is the same as for any other thing of value. It is supply and demand. At least it should be, because this is where I have stopped looking now. And it also makes sense to me. If you have ever wondered why a Bitcoin has so much dollars it, the answer could be lying in the fact that bitcoins are what people are liking more than they like to use the dollar in their daily transactions. I am not talking about all people here. But there a vast pool of people who like to use bitcoin instead of real money to buy things. 

May be, because it is a decentralized currency. There’s no authority that controls its value (that I know about). So, what’s driving all this? It is a question that I was thinking hard about.  The answer is simple- whoever wants to take part in it – can and they are called miners. And this topic goes into a lot of detail, I am stopping here to keep it simple. To generate a bitcoin a lot of computing power is required, making it obvious that it’ll be expensive. It wasn’t like this when Bitcoin appeared in the beginning. They were a lot cheaper. Now that people want to make use of them and there are so many miners present, bitcoin’s cost has increased a lot. The whole idea of digital cryptocurrencies is very interesting and difficult to understand at the same time. 

Hope I have helped a bit if you wanted to know about this.

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