THE VALUE IN CRYPTOCURRENCIES

in #cryptocurrency3 years ago (edited)
People keep asking this question,” Why are cryptocurrencies valuable?” So, I decided to come up with this article to clearly state the major two factors that are responsible .The two factors that make cryptocurrencies valuable are: Desirability and Limited Quantity.

Desirability:- The fact that people desire to have and hold onto cryptocurrencies increases the value of cryptocurrencies. For instance, a lot of people want to save their valuables in the form of bitcoin rather than money in the bank make it desirable to have. The more it became popular and widely accepted, the more its value increased. The exposure of bitcoin to the general public toward the ending of 2017 brought about its soaring, setting several new all-time high which eventually caused a massive increase in interest of Bitcoin and cryptocurrencies.

cryptocurrency-cat.jpg
credit: Crytocurrencies
Limited Quantity:- Since cryptocurrencies (Bitcoin, Litecoin, Ethereum etc) are a fully decentralized monetary system there is no central authority that regulates the monetary base. Unlike Dollar, Pound, Naira that are centrally controlled by the government, cryptocurrencies are mostly created by the nodes of a peer-to-peer network. There are predefines mathematical algorithm that generates how cryptocurrencies will be created and at what rate in advance. It is self-regulated.

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credit: Cryptocurrencies

credit: Arstechnica
credit: Wiki

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