How Cryptocurrencies have value ?

How Cryptocurrencies have value ?

By mummyrio | SIDECHAINNEWS | 11 Sep 2020


Bitcoin is about 10 k USD. Ethereum is around 200-300. That is the value of cryptocurrencies to USD. What is the real value of cryptocurrency? Where is it from? There are hundreds of new cryptocurrency every months. Now the most popular is defi. I don't have experience investing in defi.  Defi become bomming in 2020. I am not sure how long will defi becom tren. Cryptocurrency that is accepted for shoping is real money.
hodl.png

Real Cryptocurrency

A cryptocurrency is a digital or virtual currency that is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend. Many cryptocurrencies are decentralized networks based on blockchain technology—a distributed ledger enforced by a disparate network of computers.
https://www.investopedia.com/terms/c/cryptocurrency.asp

While the definition currency is Currency is a medium of exchange for goods and services
https://www.investopedia.com/terms/c/currency.asp

Cryptocurrency now is closed to digital asset. There are few cryptocurrency that become currency like bitcoin, dash, eth , litecoin , dogecoin and some others. Those cryptocurrencies become real digital currencies now. There are some retailers that accept those digital money. What about defi and other new tokens based on various networks? They are not currencies but they are digital assets. You can shop electricity power, and phone bill in bitrefill with bitcoin, litcoin, eth and dash. You can not shop with hive or hbd in bitrefill. Dogecoin , a joke coin that become real money now is better than new coins with exagerated promosing values.

A coin or token will be real currency if it is accepted as payment for buying a products and services. When it is only accepted as a exchanging asset, it is digital asset.

A digital asset will loose its value

A digital asset that is back by nothing will loose its value. There is nothing that support the asset to be more valuable. When you buy a house, your asset value will grow every year because the real estate is real asset. A house is a kind of real estate that is worth. What about hundreds of tokens in market. The price will dump after one or two months of listing in exchangers. HODL is a philosophy among traders are correct.

Hodl (/ˈhɒdəl/ HOD-əl; often written HODL) is slang in the cryptocurrency community for holding the cryptocurrency rather than selling it.
https://en.wikipedia.org/wiki/Hodl

Hodl does not mean that the baghodler or bagholders will not sell the coin or the digital assets. They will sell when they will make huge profit in real currency ( USD, Euro or othe currencies). That is trading digital asset. Hodler will not safe their asset for all their life, they will make the asset into cash in fiat because the asset is not valueable for shopping. That means that the digital asset is very vulnareble in value. That is why all tokens and coins that are not accepted as the real payment can not be real assets. I am sorry If I am too psimistic about tokens and new coins that only become tradable assets. When the community leave or sell the digital assets, the assets will loose the value.

Conclusion

HODL is selling tokens at high price. After the hodlers earn high profit, they will find new tokens to HODL again. HODL will not take place in real currency. To make real currency of a coin or token, the currency should be accepted as the payment for shopping, if not the coin or token sooner or later will loose its value.


mummyrio
mummyrio

Writer wkwkwk


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