d5000
Legendary
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Activity: 3990
Merit: 6992
Decentralization Maximalist
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April 30, 2016, 01:11:31 PM |
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That's a highly philosophical question without a clear answer. Speculation, "scarcity", community ... all of that are components of value. But how they exactly work is unclear. If we had a clear answer, someone would have already created a perfectly stable coin.
My approach is the following: - Basically all people using a cryptocoin form a community. - Each community member decides if he wants to contribute something to this community. The simplest form is money - when you simply "buy" coins. Other contributions can be network security (mining), development, marketing, etc.. - If you make a sum of the contributions of all members, you have a base value of the cryptocurrency. (There were websites that did try to do this, but I don't know if they still exist.)
Now this base value must not be equal to the coin price, as already was pointed out. The main influence are future expectations.
That are questions like: Is there a chance for the coin to succeed? Does it have unique selling propositions which could drive forward adoption or are there dangerous competitors with clear advantages? Is interest actually growing or dwindling? Are there conflicts in the community that could affect success? (That later was probably the reason for the Bitcoin bear market of the last 3-4 months which has finished some days ago)
Future expectations can be short-term, mid-term and long-term oriented. While short-term expectations are mostly based on price (as the simplest metric, using technical analysys), for a long term outlook you should check development of all pillars of the cryptocurrency, involving features, development team, marketing, and commerce/service adoption.
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