Where is the actual value of Altcoins coming from?

[jzale]

The market decides the value of the coin after it's ICO. Of course it depends first on the given price of coin during its project before it will be circulated on the market. The next part is the most interesting part. The supply-demand of the coin that most of the people here are talking about. It's really one of the factors that decides the value of the coin.

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[gribble]

Simple question, probably a more difficult one to answer:

What makes Altcoins actually valuable?

Demand and supply of altcoins from the users, investors and traders, they have made the altcoins to be valuable in their opinions, so they buy the altcoins with some purpose are like for long time investment, to be used for payment in gambling, gaming and other. Every people have different reasons to buy the altcoins, mostly peoples buy digital coins is just for making money in digital coins with trading, gambling and other way related with altcoins.

[Gecko8]

You should not only think in terms of the coins itself. Whether a coin shows a higher "value" on an exchange is currently also often just speculation. The real value is mainly depending on other more sustainable factors. For example what does the coin releasing project plan to solve as business problem and how they are planning to solve it. Certainly also the quality of the development team is important and last but not least, which (management) members are in the project / Start-up company. You can ask yourself the question, are those members already for quite some time in the respective market for example.

[mung_nasib]

the value of the exchange is relatively high and in getting quite easy even until many are inclined to seek its for additional income.

[Ayiranorea]

Same as that happens with bitcoin, altcoins too have certain market value as well certain market circulation volume. This will make the demand to supply difference and based on this the price fluctuation as well the growth happens. Even now heard of a news that altcoins value were made by the illuminati's.

[yslyv]

This is a really good question. When most of them have no value and function in real world, what makes those things valuable? Ok i know answer of this question. We do it.

[killerfrost]

Simple question, probably a more difficult one to answer:

What makes Altcoins actually valuable?

That is the potential for its development. A good entrepreneur is someone who always knows which currencies have the potential to grow, so Altcoin's prices are always valuable.

[4hajs]

Well for the most altcoin people need to believe they are worth something. But there are some altcoins with real usage, those altcoins will survive longer.

[BTCXRPTalk]

Yes obviously it's a supply-demand thing.

But in in contrast to stocks in fiat world, where the businesses generate revenue/profits, this is not the case here.

How is it possible to say, that for example, Stratis should have a 600$ million market cap? They don't have any revenue at all currently if I'm not mistaken? Will they have revenue in the future and that's what people speculate on?

[Koadharber]

Same as that happens with bitcoin, altcoins too have certain market value as well certain market circulation volume. This will make the demand to supply difference and based on this the price fluctuation as well the growth happens. Even now heard of a news that altcoins value were made by the illuminati's.

Value of altcoins were made by illuminati? Wow! Such a great news.. By the way, if we did talk on the realistic things on here,value of those altcoin do really came for its supply and demand and i dont believe on those bullshit news made by other people.If theres a user of such coin then expect there would really be a value on it.This is why we should really be wise on selecting altcoin which do have potential if we do really like to make profits from it.

[WildWestRider]

Some of them have features that bitcoin doesn't have - see Ether, Monero etc. Some are used to move money because bitcoin fees are too high, and by definition this means buying and selling the alts as you move them about. And some of it is speculators piling in because they feel it's a cheap way to earn some bitcoin - buy some undiscovered alt, watch the price rise, sell for bitcoin.

...a potentially viable strategy for those of us that can't afford to buy bitcoin right now!

[WildWestRider]

It should really have nothing to do with value of the company unless the token actually represents ownership. In most cases, tokens are an asset that can generate revenue, so (in my opinion) the proper way to value a token is to look at the potential revenue (which seems almost impossible to do for most companies right now) and value the token based on a risk-adjusted yield on cost.

Think of a token like owning a taxi medallion in NYC. You can't legally drive a taxi unless you have a medallion, so the price of one fluctuates based on how much money one can earn you and the risk/volatility of those earnings relative to other investment options.

Before Uber, owning a medallion pretty much guaranteed consistent income, so an owner might be happy with a 5% yield for the risk. Uber has changed the market dramatically, so now owners might require a 10% yield because of the added risk.

To be more specific, let's say pre-Uber a medallion owner could expect $50k per year in income. The value of that medallion would be be $1 million ($50k / 5%). Let's say after Uber, an owner can only expect $35k per year, with less certainty. The value would now be $437,500 ($35k / 8%).

Of course, estimating revenue is hard for altcoins because they are so new, but it should get easier in time.

I think the market will transition to this approach in time, but right now altcoins are mostly just trading on pure speculation.

One last point - Similar to tokens, part of what gives a medallion its value is the fact there's a limited supply. Even the risk that more could be added would have an impact on value, which is why understanding hard caps and knowing what happens to unsold tokens is important.

Analogies relating bitcoin to tangible services helps us noobs understand, thanks, this is great!