How is that cryptocurrency has economic value?
Updated: May 10, 2021
The answer is simple: cryptocoins have value because people assume they are valuable. As oddly as this sounds, this is the basic reason.There are other reasons too. Without going into technical details, we can name a few:
They allow to buy goods and services;
They are “awarded” as a payment for work;
They are scarce;
They are fungible;
They can be an investment;
They are necessary to run apps on the blockchain;
They can be purchased with fiat and viceversa.
Let’s go through these reasons in detail:
Crypto has value because they allow to buy goods and services
They have value because are “awarded” as a payment for work
Crypto are valuable because are scarce
Crypto are fungible
Crypto can be an investment
Crypto are necessary to run applications on the blockchain
Crypto can be purchased with fiat and viceversa
All these reasons lead us back to our first statement. Cryptocurrency is valuable and can be used in all these forms, because most people assume they have value, and the market seems to agree. Similarly to when pieces of paper started representing value, criptocoins are opening a path as digital currency… besides many other real-world applications.