Is the bubble gonna burst? It seems as if many financial experts are relieved to breathe a sigh of relief. Finally, what they’ve been predicting all this time is happening. Bitcoin and the remaining crypto currencies fall to the value they are entitled to: zero. Bitcoin has lost more than 50 percent of its course since December. A lot of other coins have also droned in the floor. There is a desperate search for reasons. Prohibitions in Korea or the Chinese New Year celebration, to the converting into cash to buy gifts. But slowly. Is it really a bubble bursting?
Last year there was an impressive rally with cryptocurrencies. All traffic lights were green all year round. It just went upstairs. Those who entered Ether early in the year with 250 Euro for example, could look forward to the equivalent of a luxury holiday in the Caribbean at the end of the year. This ultimately attracted many non-experts and adventurers to the market.
This is also one of the reasons why this cryptographic market is so volatile, inscrutable and difficult to assess. In the meantime, a colourful mixture of tech freaks, gamblers and believers has gathered here. Some want fast money, others believe in the value of coins. But what exactly is the value of bitcoins and ethers? Do these things have any value at all?
Is there a real value to the Bitcoin?
Bankers and investment gurus like Warren Buffet say no. In other words, there is nothing that makes these digital coins valuable. Many fans, on the other hand, see the realistic value of a bitcoin as close to one million dollars. Then there is still some upside potential. But where should this value come from, what stands in the way of Bitcoin in reality?
The value of companies such as Twitter, Telegram or Google was also difficult to determine in the early days. Digital business models, networks and exponential growth were new and experts were uncertain about the assessment. Today, the situation is similar for cryptocurrencies, tokens and coins. The price can be viewed daily on the Internet. But what is its real value?
There are a few factors that can determine this value. Behind most digital currencies, for example, is a network model. The more people participate in this network, the greater the value that is created. A further important factor for the valuation is the secondary industry, which now actively uses cryptocurrencies. Here we are experiencing that there are more and more startups, which are based on the blockchain basics of Bitcoin or Ethereum. Ethereum business model right now is literally pumping out coins on daily basis via ICOs.
The hunger for a digital currency remains
What about the purposes for cryptocurrencies? We live in the age of digitalization. The number of applications for decentralized, digital money are becoming exponential.
Business models based on blockchain technology are launched almost daily. In addition, large banks are now also entering the market.
All of this together could well be described as the true value of cryptocurrencies. Investors should urgently consider whether the coin they like is gathering these values behind them. Of course, there are also coins or tokens that do not have this value and are more suitable as a tool for gamblers. But if it doesn’t come to a world economic crisis or similar disastrous conditions, the value of bitcoin, litecoin or ether is expected to rise again in the near future. In any case, the current slump in share prices has not caused their actual value to fall. Just the price.
Especially the idea behind virtual currencies has a value. But not only ideologically. Every person with a smartphone and Internet access can now participate in this financial system of the future. Worldwide. Even if he lives in a country that prohibits cryptocurrencies. The market is said to have been shaken by the bans in China and Korea, among other things. However, the hunger of users for a decentralized currency and more freedom within our regulated financial systems cannot shake that in any way.
Admir Tulic is a blogger at CaptainAltcoin.com. In the online world, you’ll mostly find him nerd-discussing cryptocurrencies and bitcoin scaling solutions. In the offline world, he spends most of his time telling his friends he is starting going to the gym next week.
Source: Read Full Article