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Mwangi

Do cryptocurrencies have intrinsic values?

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The value of cryptocurrencies is continuing to increase significantly. The value has been changing from time to time; therefore, there is a need to access the value of cryptocurrencies looking it from a better view.

To predict the future value of a cryptocurrency, you need to know how to derive this value. When measuring the value of something, you check the goodness in it. Intrinsic goods are the good things that the currency will do within and outside themselves. The value of a cryptocurrency lies in how it can constructively and efficiently function. Coins are valuable goods, and for them to be effective, they need to act as a medium of exchange and be storage of value.

Before currency stores any value, it needs to be in itself stable. And if the value of currency needs to be permanent, it needs to facilitate transactions effectively; for it to fulfill this function, it needs to be available across the globe. When a currency is accepted in most parts of the world, it becomes more flexible to carry out transactions, and therefore its value stabilizes. Typically many people will take it as a means of payment, and as most people adopt it, its value will also increase.

If you base the value of a cryptocurrency depending on its flexibility and availability, its viability will come when the users of the currency understand it best to facilitate transactions than use it as a medium of exchange. The transaction function of cryptocurrencies will help it replace the fiat currencies.

When you look at the case where paper money replaced barter exchange, it was based on being a better medium of exchange. Paper money was more efficient; it was better trusted and reciprocated equally to the quantity you receive. Therefore, for a cryptocurrency to take over the paper currency, it first needs to be an excellent medium of exchange and solve the trust and reciprocity issues.

The main challenge that the crypto faces is to gain the trust of its users and end suspicion so that it can be a legal medium of exchange.

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