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Value of crypto currencies or Crypto Value


In order to ascertain the value of crypto currency or to make crypto valuation we need to look back since their inception. According to crypto news available though various media, in 2009, around 9 years back, Satoshi Nakamoto introduced the foundation of crypto currency craze that we are experiencing in the present day. The whole concept of crypto currency is so popular, but still everyone doesnt seem to like them. There are so many different names for crypto currencies, like Ponzi Schemes, Speculative Bubble, Get rich Quick Schemes, and even as Fraud. The popularity of crypto currencies is so much these days that people have gained a habit to keep tracking crypto price live so that from this crypto rate live they may be able to make better investment strategies on the basis of rate fluctuation pattern. Many of them are ableto gain benefit on the baiss of analysis made under crypto rates today.
There are people who are quite unsure dealing with crypto currency. It is because they are not aware of the value of digital currencies. However, they count on someof their popular features that also resemble traditional currencies or fiat currencies like crypto currency loan, and determine their value on the basis of these and other factors.. Now the question that arises is what do you mean by value? Does it affect or influence the way we look at digital or crypto currencies?

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What do you mean by value?

This is a quite simple answer, but a difficult one to answer. In order to understand the deeper meaning of value, and get closer to the answer, you need to ask several other questions and even get answers as well.

  • Why are gold, diamond and other precious stones valued high? Other than a great gift, they dont seem to be of much value in your daily life. They are also referred as the store of value.
  • There are some paintings that costs around $100. On the other hand, there are paintings that are sold at $100 million. What makes the difference because both the paintings?
  • Why do some pens are tagged at just $5, while others at $100? You cannot ignore the fact that both serve the purpose of writing.
  • A $20 bill is valued at $20. What is the reason behind?

  • From the above questions, there is one thing that becomes very clear about the concept of value. It is basically the price that the buyer and the seller both have the will to pay and accept. The value of anything can be visualized like a story or a vision of buying and selling.
    Because of the scarcity or dearth of gold, diamonds and other precious stones, they are considered of great value. The story of a $100 million painting might be that of Picasso or other famous painter. Moreover, the story of $100 pen includes you in the elite class. Now, the question is what is the story behind the $20 bill? This story of value includes the government issuing a legal tender for a bill valuing the paper at $10. There is no gold or anything precious that backs the bill value. You can trade your $20 share of gold and other precious items. The only diference is that crypto currencies are first launced in market via ICO.

    The reality behind fiat currencies

    A fiat currency is similar to a US Dollar. It is also a currency that has the backing of a government that has the power to issue or publish money. But, it doesnt have the backing or support from a physical commodity. Fiat currency can be claimed to be an object, in the form of paper that is assigned a particular value by a group of people.
    Fluctuations in fiat currency value due to dual factors
    There can be fluctuations in the value of fiat currency based on mainly two factors:

    1. The price that people desire to pay for it
    2. The supply and demand chain in the market

    What is fiat currency all about?

    Majority of the fiat currencies of the current era, are basically a piece of paper that the government in authority issues some value to it. Since it is the government we selected that allocates the specific value, we can rely or trust in the value of the paper as well. If you give a closer look, you will find that all the money used by us are not in the form of paper. They are in a form of digital databases that the banks and other financial institutions maintain for us. At a basic level, a fiat currency is very much similar to dollars. It is like a collection of points that can be monitored in the database of a base in a centralized ledger technology.
    The crypto currency market is considered volatile and it is all about hype or speculation There are so many people out there who consider the world of virtual currency or crypto currency as volatile. They believe that the whole concept has been created on a hype by people and crypto exchanges. But, if you give a close look or observation to the financial market of the current generation, you will come across some form or other hype. It is just that crypto currencies got trapped in some bad publicity.
    For example, take the case of the stock market today. If you study the Apples shareholders monitoring on the new product launches, milestones, balance sheet and other aspects, a quite a high percentage of their value gets from the supply and demand along with the sentiment that the brand has. The investors are often found to invest their wealth solely based on the hype of the value of the shares that might yield in a months or a years time. Same is the case with crypto market or crypto exchange. Image

    Investors invest their money based on future speculation of digital currency or crypto currencies
    The investors of the current generation dont invest their capital based on the value of today. They invest based on the value that will become in the future. It means that the investors are speculating things and making the investment. There is indeed a hype about it, and it is used in practice as well. Let us take a small example to understand it better.
    Let us talk about the price of a painting and how it is done. A price tag is not given to a painting just because of the following factors:

  • Of the vivid colors used
  • The quality or the canvas
  • The finesse with which the color strokes have been made
  • The years of experience of an artist or a painter

  • In fact, the entire event is actually based on the interaction between the buyers and the sellers. How much is the buyer willing to pay? Is the seller happy to accept the payment? There is a story behind the interaction created between the seller and the buyer. Let us move back to where the meaning of value was explained. Why do people buy the paintings of Picasso at a high price tag. Well, the history, and paint quality has a big role to play in buying the paintings at high prices. This is exactly the story of crypto currency.

    What is the story behind crypto currencies?

    Let us find out the story behind crypto currencies.
    Like everything that is considered valuable, crypto currencies represent a story of value as well. Money is a way of collecting points that can be monitored by the banks and financial institutions on our behalf. What happens when a situation arises that the bank decided to steal your money? What if the database of the bank gets stolen or destroyed? There are so many questions with a doubt. But the answer to all the questions is based on a single aspect, we refer as trust.

    There could be a possibility that there is absolutely no one who can be trusted in the integrity of the database. This is the story behind crypto or virtual currencies. It is an intangible currency that resides on the internet. Majority of the money resides on the servers of financial institutions and banks. Customers deposit money which gets reflected on the account.

    Why are we so positive about crypto or digital currencies?

    Crypto currencies doesnt just represent the potential to transfer money to others with ease and convenience. But, it reflects the future where we all are responsible for each others financial well being and health. The advent of crypto currencies is a revolution because it has totally transformed the way we exchange money between governments, business ventures, people and more. In a way, it can be said that crypto currencies challenge the traditional or the conventional norms of exchanging money.
    In the present era, we trust the banks and institutions as a safeguarded store of our money. In fact, we are made to believe in it. We are positive and optimistic about digital or crypto currencies because the way we communicate and interact with each other is amazingly progressive. With the presence of the crypto currency, the entire financial system is getting redefined.
    To give more value and recognition to crypto currencies escrow services are very popular in this field.
    How do you define the price or value of crypto currency in the current era? There is no doubt to the fact that crypto currency is a revolutionary form of currency being simply a result of cryptograhy. Like any other currency out there in the market, even digital currencies have value. It is because the common mass believes so. There are currencies that are backed by precious metals like gold, silver, and diamond and so on. While, other currencies are not backed by anything except the trust of the people and thereby used an exchange unit.
    When crypto currencies were designed, it was created as a form or unit of exchange. Moreover, it is also considered as the place to store your digital assets without depending on the Central Bank of that particular nation.

    What are the aspects that define the price or value of a crypto currency?
    There are certain aspects that can clearly define the price and value of a crypto currency. Some of them include:

  • The difficulty level of Blockchain
  • The difficulty level of Blockchain
  • There is limited supply or supply/demand
  • Securing Blockchain via the energy incorporated in the form of electricity
  • Scams and frauds
  • Price rate of Bitcoin
  • View of the public on the value of the crypto currency
  • The interference and response of media
  • Investors investing in bitcoin or digital currencies
  • A weakening situation of crypto market or volume of crypto transactions
  • Emerging innovations of crypto currencies, like Monero, etc.
  • Governmental or legal issues as crypto China or Chinese crypto Problem
  • Confidence in traditional or conventional financial systems


  • Let us get into the details on the factors affecting the value or price of crypto currencies

    Difficulty level of Blockchain When the Blockchain or crypto chain is at the highest security level, the mining will be extremely difficult. This also makes the perceived value or the price of crypto currency higher. Hence, the coins are quite challenging to get through the mining. This does have an impact on the price rate of digital currencies and the energy usage in the form of electricity. The best examples of such scenario are crypto currencies, Bitcoin and Litecoin. Image

    There is limited supply or supply/demand (Demand and Supply of Crypto currencies)
    A precious metal can acquire value because of their unique function or utility and a limited supply. The value or the price of crypto currency is often related to the supply and demand. Supply/Demand is a plain economic aspect that can affect the price rate of several products. Bitcoin and other crypto currencies are considered as an asset in some nations, while as a currency in several others.

    For instance, let us consider that Bitcoin has 21 million whole units which is divisible 100 million times. If there are 7 billion people across the globe, even when 1 billion adopted Bitcoin, without a considerable price tag, the entire 21 million units wont be available throughout the planet. The supply is also at a constant rate. Hence, there will be a limitation of supply and people will invest more in order to get the coins which they believe have value.
    Securing Blockchain via the energy incorporated in the form of electricity
    When the matter is about securing Blockchains, the energy put into it can be quite intensive. Energy that is used to acquire Blockchains is in the form of electricity usage. You will be surprised to find that in case of Bitcoin, the Blockchain can use energy which is equivalent to that of the electricity usage by a small nation. This definitely plays its part on the price rate. There is a certain amount of energy required to mine single Bitcoin.
    Crypo currency Scams and Crypto currency Fraud (Like popular Bitcoin Scam or Bitcoin Fraud) Crypto currencies are often referred as a scam which also somehow impacts in determining its value at any plavce like while determining the crypto currency value in European Union the reliability of events and incidents pertaining to crypto currencies in that place or region will be counted, the same holds good for crypto currency value in China, and so on. This is because a coin might promise with the latest technology, but before it gets released, the developers can premine it. This implies that the developers have an abundance of coin supply before release. Hence, there is a chance of the value of the crypto currency getting crashed, and thereby, giving the scammers the opportunity to earn a large amount of money.
    In majority of the cases prosecuting such scams is quite challenging, and even impossible at times. Instamining is yet another aspect that can give the opportunity to mine the coins at a higher rate in the beginning in order to acquire the same goal after they get released. Such scams can often force people to invest in crypto currency towards the developers, where the aim of the scammers is to run away with the money.
    It is the nature of the Blockchain, premines and instamines, that they can be easily detected. When such cases are identified, the value of the coins drops sharply. This can take place any time before or after the developers of crypto currency dump their coins.

    Price rate of Bitcoin
    Bitcoin is considered as the reserve currency in the domain of digital currency. It has often been found that the rise and fall in the price of Bitcoin or Bitcoin value has affected other crypto currencies as well. This has particularly been found in the Litecoin price fluctuations. The fluctuation in Bitcoin price rate seems to be directly proportional to the rise and fall in the price of Litecoin. The reason is perhaps very simple. Since Bitcoin was the first mainstream crypto currency and is the most popular one, it can influence the other crypto currencies as well.
    The function of a currency and the ease of using and storing The function or the utility of the crypto currency plays a dominant role in the price of the crypto currencyor crypto coin. If there is no use of digital currency, as an investment or a mode of payment, it has perhaps little or no value at all. If you take the case of Bitcoin, you will find that as a payment mode its use is quite high. This means that the utility is high for Bitcoin.
    Moreover, the high energy usage and the ease of storing crypto currency in a digital wallet, also known as crypto wallet or virtual wallet, make utility quite high priced. When there is a change made to utility, there can be a situation of price volatility. For instance, in case of Ether. The currency was developed in the form of a smart contract platform, which increased its price over several other crypto currencies available in the market.
    View of the public on the value of the crypto currency
    The price of crypto currencies which are outcomes of crypto technology can be influenced in a big way with the way common mass or public perceives it. For example, in case of Bitcoin, the positive reaction of the people plays a dominant role. This is mainly focused on the competition crypto currencies give to the traditional financial system. Similarly, the negative reactions and the criminal activities associated with digital currencies can affect the pricing as well.
    The major hack on the crypto currency exchange, Mt. Gox negatively affected the reputation of Bitcoin, which influenced the price as well. But, at the same time, the innovations of the payment gateways fo payment services, digital signatures and online wallets creates a positive outcome. There are so many crypto currencies that are not known by us. Hence, their pricing is much lower than the popular currencies like Bitcoin, Litecoin, Ether, Altcoin and so on.
    Furthermore, it is also found that there are several crypto currencies that are reusing the code of Bitcoin with just minor chances in the specifications and adding a few features. But, there doesnt seem to be any digital currency that can potentially dominate over the reputation and utility of Bitcoin. If it does, the pricing of crypto currencies will fluctuate. This holds good almost at all places, so this is what determines crypto price in the US almost as much as it determines crypto price in the Gulf region.
    The interference and the response of media
    The reporting of media on Bitcoin in a positive or a negative way can influence the perceptions of the public about Bitcoin and other crypto currency and alter the pricing. There are several media firms that are owned by influential people and can cause a manipulation in the price along with positive or negative media reporting. Basically, the media can be used as a dominant path for potential price manipulation.
    Investors investing in digital currencies
    The investors can play a big role in manipulating or affecting the price of crypto currencies, especially those that are not much known to the public. The price can be manipulated in the following ways:

  • Since the investors have a large amount of wealth at their disposal, they can buy a high percentage of coin supply. In order to promote a good thing about the coin, the price can be increased.
  • When an investor makes a large investment in smaller and lesser known coins, it can cause sudden increase or fall in the price.
  • When the public look at the investors in crypto currencies, they gain confidence that impels them to invest as well. This lead to the increase in the demand for currency and thereby higher is the pricing.
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    A weakening situation of market

    A weakening situation of the market dont imply to the already developed and reputed crypto currencies like Bitcoin, Ether, Litecon, Peercoin and others. The market dilution doesnt influence much to those crypto currencies that have been created for unique utility at the development time. There are several new crypto currencies that get released on a daily basis. Often, such crypto currencies are found to be without much practical function. Hence, holding a strong base or ground in an already unstable or diluted market is quite a challenging thing. Bitcoin has the reputation of being the gold coin, Litecoin as the silver. Moreover, Ether is a smart contract token that allows distribution, and secure execution of smart contracts. Peercoin is a combo of innovative POS and POW.

    Emerging innovations of crypto currencies
    The innovative or the creative factor of crypto currencies play a dominant role in the influencing of price. There are several digital currencies that are simply a clone of Bitcoin. This might be the reason that they are not popular and as reputed as the major crypto currencies that people invest in. Let us have a look at some of the innovative factors of some of the digital currencies.

    Bitcoin:
    It is considered as a mainstream crypto currency that was released as an open source. In terms of the price, it still holds the top most position even after nine years of its creation. It is considered as the gold coin in the digital currency market.

    Litecoin:
    In contrast to Bitcoins gold, Litecoin was created as the silver coin. It was created to be used for smaller payments, but with faster transaction result. There are more numbers of blocks used. Thus, the network capacity is also higher.

    Ether:
    When it was designed, it was not created as a currency, but today, it is often used as one. Ether uses its very own POW hash algorithm along with system rules. Hence, it is designed as a token to be used in the Ether network as a smart contract

    Unobtanium:
    Unobtanium was developed as a crypto currency, which is in itself very rare. It was developed in order to store values with a limited supply of 250,000 coins. It is considered as an innovation in its own way.

    Governmental or legal issues can affect the price of the crypto currency There is no doubt to the fact that the governmental or legal issues can influence the price of crypto currencies. A legal move like making crypto currency official as a currency can be quite positive. Similarly, on the other hand, when a nation bans a digital currency, it can yield negative effects. There are countries that have totally banned the use of currency. On the other hand, there are so many nations that consider crypto currency as an official asset for tax purposes.
    You can blame the absence of a legal framework in several nations, which is causing a big hurdle or obstacle for currencies. This is because, the legal regulations are still on the path of development. Moreover, the restricted authority of the government to control crypto currency on open internet, can sometimes go against the will of the government.
    Confidence in traditional or conventional financial systems
    When there is an increase in the price of a traditional or conventional currency, people can gain the confidence to store their assets using the traditional or conventional currency. For example, when the price of the US dollar goes up, you have the confidence in the traditional system. This can definitely have an influence on the price of crypto currencies, Bitcoin, in particular.
    The crypto currency market is extremely volatile in nature We all are aware of the volatile nature of the crypto currency market. This is because of the fact that crypto currency is emerging and there are several changes that take place within the financial system. The price of a coin can actually fluctuate rapidly, often making it a very risky investment. This is highly risky, especially when there is no proper research. But its utility of investment and payment can be beneficial. Over the years, the volatile nature of crypto currencies has decreased. It is speculated that in the coming years, there will a lower volatility in the prices of crypto currencies.
    The world of crypto currency is here to stay and dominate
    The article discusses the major driving aspects of changing crypto currency prices and why people like us give it so much value. Starting from the price of the US dollar, the price of Bitcoin, which is the de factor currency, electricity energy to secure Blockchains of coins, reputation, perceptions of people, media response, scams, market dilution, and governmental regulations and so many other factors play a dominant role in influencing the value or price of crypto currencies.
    It is strongly believed that the world of crypto currency will remain and people will give it even more value as a form of storing assets, transacting money and as an investment. It is no doubt a revolutionary way of payment processing that goes beyond the geographical boundaries. This is one of the reasons which helps crypto currencies to rise in popularity and use.

    In conclusion
    The article very clearly discuses on the factors that affect or influence the value of digital currencies. Moreover, it also discusses on the aspects that can render value to crypto currencies. It boils down to the conclusion of the perception that anything has a value if people believe it has a value, despite the reasons. The primary factors that affect the value of a crypto currency has been clearly discussed and analysed in the article. From the article we get to understand one prime aspect- we have to believe in the perception of crypto currency being valuable. This way crypto currency can be viewed in the positive light.

    Before you plan to invest in any crypto currency, there are certain aspects that you must address. Have a look at them before you take a step forward and invest in digital currency.

    <>Crypto is not a monetary investment in the real currency world. You are basically assuming

  • that you will be making high profits in the future. You are investing in the techno future world.
  • Dont trust in the information given out about crypto currency randomly. There can be wrong things written about it. It is important that you do your own research work well before you plan to invest in crypto currency. Hence, it is necessary that you are careful and cautious about everything.
  • There might be a situation when you need to hold on after you bought a coin and invested in crypto currency. You might be very disappointed and upset because investing in crypto has screwed you up. You were too stupid to have made the wrong decision. Now you are quite sure that nothing is certain and getting punished for it. You have to understand that it was your mistake and now look forward to make things better.
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