Digital currencies have several important advantages over traditional money and popular financial and physical assets. What is the reason? The fact is that cryptocurrencies solve numerous problems associated with the centralized nature of paper currencies and other instruments. Let’s list them.
There is almost no inflation in the cryptocurrency world. However, to some extent, it is still present, since it is needed to financially stimulate miners mining blocks. Switching to a protocol with proof of ownership will further reduce inflation and increase the value of cryptocurrencies (the Ethereum network is supposed to introduce a hybrid version of POW / POS by the end of 2017). The most important thing here is that the magnitude of inflation is known and is not hidden by anyone. In the case of the banking system, the inflation rate is not known, and central banks can print any amount of money without coordination with the population. This is one of the main reasons why cryptocurrencies get more and more supporters. Cryptocurrency money transfers know no boundaries. Being geographically in Thailand, you can work for the American company. In this case, receiving money from another country can be very difficult. But now there is no such problem: cryptocurrencies do not recognize boundaries and can be transferred from point A to point B in a matter of seconds
What determines the value of cryptocurrency?
cryptocurrency coinbase fees valueFirst, some cryptocurrencies are recognized and valued as assets. For example, Bitcoin in the cryptocurrency space plays the role of gold. It is believed that storing capital in it is profitable.
Secondly, the value of the currency. It is known that even currencies issued by central banks have some kind of capitalization. It is equal to the value of all banknotes in circulation. This indicator is also important for cryptocurrencies.