What Makes a Cryptocurrency Valuable?

When the cryptocurrencies like Bitcoin, Iitecoin, dogecoin, etc. are becoming popular around the world, it is absurd to say that there won’t be reliable exchanges and brokerage firms to provide the much needed services. There are trusted cryptocurrency exchanges that are helping out the users to get access to the cryptocurrencies and use them further.

Needless to say cryptocurrencies are being released by the exchanges which are a new system of money for the internet. It must be noted that cryptocurrencies work on the concept of digital currency and play a vital role in the modern day financial technologies. These are based on blockchain which is transforming a lot of other things as well.

As has been mentioned above cryptocurrencies are becoming popular among the banking organizations and governments as well a lot of businesses have started offering cryptocurrency exchange services. These organizations initialize the peer to peer payment system for individuals having no central authority. Let’s put this in a simple way – cloud mining refers to using processing power that shared and run from the so-called remote data centers. To be a part of the cloud mining, you will only need a PC and an optional cryptocurrency wallet.

What Makes a Cryptocurrency Valuable?

There is only one thing that ultimately generates demand, and that is desire for satisfaction in the broadest sense. In as much as the offer of that satisfaction is limited, there is a tension between demand and limited offer, and that tension is called “price”. We all get great satisfaction from breathing air (so much that if we don’t, we die), but the offer of air is larger than the demand for the moment, so the price is zero. There is no tension, so the price is zero, but there is (huge) value (our life depends on it). Essentially, only goods and services can directly help us in getting satisfaction so in as much as they are not in unlimited supply, only they are the ultimate source of “price”.

However, we can anticipate, and make plans. We can make plans to provide goods and services where there is a tension (for which there is demand, and still limited or in-existent offer) in order to be able to trade those for other things (goods and services) that give us satisfaction. Doing so increases a demand for production capital, and hence production capital also has a price.

And finally, there are “monetary items” which have little or no actual potential, nor to satisfy directly, or to be production capital, but for which there has occurred an infinitely recursive belief that they have a price.

Whenever such an infinite belief system gets hold, the monetary item gets a price (is hence a carrier of value). Nothing else is needed for this belief system to take hold. Cryptocurrency is an example. Historically, gold got such a belief system attached to it, and with some coercion, fiat money also gets to have such a belief system.

Now, most people don’t like the idea that their precious monetary assets are nothing but “belief”, and go and look for its “intrinsic value”, but there isn’t any. In as much as a monetary item also has intrinsic value as direct.

Source: B2C