The value of cryptocurrencies is often associated with their demand and supply. That is, for cryptocurrencies with high demand and limited supply, the value would be high. But, it’s also said that since cryptocurrencies are unregulated, they have no real value. Is it true? Let’s find out.

Theoretically, cryptocurrencies have no intrinsic value. Intrinsic value refers to the actual physical value of an asset, i.e. the value that can be gained from selling or owning it. For example, traditional currencies like fiat have real value that is guaranteed by banks. On the other hand, the value of cryptocurrencies are not generally based on anything and certainly not guaranteed by anyone. In essence, they are nothing but a store of wealth. However, things are changing for good.

As cryptocurrencies and blockchain (the technology behind decentralize payments) are becoming mainstream, more and more people and organizations globally are adopting them. That said, the number of venues where crypto coins can be used for payment is increasing every day, which will have a direct impact on the intrinsic value of crypto coins.

Does the Libra coin have real value?

Unlike many cryptocurrencies that are pure virtual tokens with nothing backing them up, Libra Coin is actually backed by the Libra Ecosystem. As the native token of Libra, the coin is poised to grow in popularity and value with time. Why? Because the Libra platform users get incentives and rewards for using the Libra coin for digital payments. And as a global decentralized payment system, Libra coin can be practically used for fast & low-cost e-commerce payments anywhere in the world.

So, what drives the value of cryptocurrencies? Let’s figure it out.

How does the value of cryptocurrencies increase?

As we mentioned before, the value of a cryptocurrency is largely based on its demand and supply. Because there is a demand for bitcoin, it has value in the eyes of the holder. The few companies and merchants who are accepting bitcoin for payment are doing that because they believe in the worth of bitcoin and consider it valuable.

The same is true for the libra coin. The Libra Ecosystem has a large community of merchants, businesses, investors, and crypto users globally, who all believe in the power of the Libra coin and want to use it to get discounts and incentives on digital payments. And because of this, the demand for the Libra coin is increasing every day as more and more investors/businesses are joining the Libra community. As the demand grows, so does the coin value. This is the reason why the value of the Libra coin has nearly doubled in just about a year.

Unlike other cryptocurrencies whose value isn’t usually backed by real entities, the libra coin gets its value from a powerful community of e-commerce users, traders and manufacturers connected through a single, global digital payment system.

Original Source: www.mytrendingstories.com