So, Read On If You Want The Definitive Answer On Where Cryptocurrencies Get Their Value.
All this said though, you might still be scratching your head going, but bitcoin and other crypto isn't backed by anything! well neither’s gold, is it? Ever since nixon removed the usd from the gold standard nothing has backed the usd. Due to the fact that coins currently do not have stable price predictions, stablecoins have made their way into the crypto market with a safeguarded value proposition.
Isn’t That Just A Bunch Of Lumber And Drywall?
In a sense, bitcoin’s value is derived from our common belief that bitcoin has value. The dinar used to be pegged to the us dollar, however as the gulf war started and sanctions were placed on iraq, the rate on international forex markets plummeted. It is up to you whether you want to believe it, or not.
I Read An Interesting Piece Comparing Tether To The Iraqi Swiss Dinar.
The current price of a given cryptocurrency or token is solely determined by secondary trading markets, aka cryptocurrency exchanges. And if it only exists behind a computer screen, how is its value determined? The argument for bitcoin’s value is similar to that for gold, a commodity that shares characteristics with the cryptocurrency.
Ether And Bitcoin Are Beans Inside Giant, Inviolable Bean Counters:
To elaborate more on bitcoin, that asset is backed by the mathematics that power the underlying blockchain technology. The coin proved to be very popular at its peak in the 1990s, with at least. But, you don’t have to be a technical whiz or.
Or What About Your House?
This state of affairs is alarming, but there are also pluses to it. In this clip following the us federal reserve meeting on wednesday, fed chair jerome powell addresses a question about cryptocurrencies and says that they are not posing a financial stability risk for a broader economy at the moment. The day after that it might be worth $200.00.