How Cryptocurrency Has Value

How cryptocurrency has value

What gives cryptocurrency value?

How do you know the coin you are investing in has any future potential?

How cryptocurrency has value

Is it a short term or long term investment coin?

Or is it a pump and dump type of coin with manipulated price rising which cannot really recover after the dump.

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These are important questions to ask and know before investing in crypto-currency, especially now that many new people who are completely unfamiliar with crypto-currency prior to joining Steemit, will not even know the answers too.

So hopefully, this post would give you a basic idea on what gives digital currency value.

1) Demand Digital currencies have no intrinsic value.

So what gives any digital currency value are the people. People willing to pay for the coin at the price set gives the coin value.

How cryptocurrency has value

If there are no people willing to buy then the coin would have no value whatsoever. So basically the coin needs to have high demand with a lot of people wanting to buy the coin. And since digital currencies tend to have limited supply, when the demand is high, what happens to the price of something that is in low supply but high demand?

How cryptocurrency has value

It goes up!

2) Concept  The purpose of the coin and why it was created. There are hundreds of coins out there so the coin should have a purpose that is appealing, unique and would interest people to buy it.

3) Usage The coin should be able to be used by people, otherwise how would it ever gain value if people are not willing to accept it in trade.

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The more usage the better it is for the value of the coin.

4) Infrastructure The coin should have infrastructure built around the coin which basically fulfills its concept and enables its usage.

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The more infrastructure the better it is for the coin and its users.

5) Big Community To go viral the coin should have a strong active community of people who support the coin. If no one ever supports the coin it would go nowhere.

How cryptocurrency has value

6) Active admin  An admin and development team who are constantly working on the coin and its success. If the admin abandons the coins development then it would go nowhere.

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So to summarize for a crypto-currency to have demand, points 2,3,4,5 and 6 need to be there - especially if it is a  long term project that is to have any success.

Don't fool for scam pump and dump coins that have no real future potential, because they do not even fulfill any of the following points whatsoever, make sure you do your due diligence before hand.

Hope this helps...