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The Idea Of Value In Crypto

Dec. 04, 2018 12:56 PM ETBTC-USD7 Comments
BioTrench profile picture


  • The idea of value has been continuously evolving in the world of cryptocurrencies.
  • More and more models are being proposed that aim for better linkage between adoption and value.
  • The continuing fall in cryptocurrency prices is gradually unearthing more interesting opportunities.

ChartBitcoin Close Price data by YCharts

The crypto market has been hitting new lows over the past year and the recent plummet in price hasn't helped. Everything is a stark reminder of the volatility and speculative nature of cryptocurrencies. However, that hasn't stopped progress. Many emerging solutions are using blockchain in an interesting manner and adoption is slowly moving forward. The landscape is rapidly evolving and the face of crypto will quickly change over the next few years. Current protocols are getting improvements to address shortcomings (e.g. rootstock for BTC), while competing technologies spring up to target crypto needs. Just this year alone, the number of USD stable coins has been multiplying like rabbits (e.g. Gemini dollar, Stronghold USD, USD Coin, True USD, and several others). Meanwhile, corporations have been announcing partnerships with private and public blockchain solutions on a regular basis. But a question that often comes up is “What is the value of a digital currency”?

Looking for value:

The simple answer is "value is arbitrarily defined". In the current state, a cryptocurrency’s value is pure speculation and is guaranteed only at the time of transaction. While arguments based on supply and demand, scarcity, store of value, etc. have been made, it doesn’t change the fact that there is a general lack of intrinsic value for a significant number of digital assets. At one point, some have tried arguing that the cost of mining could serve as a baseline indicator of value for mineable currencies; however, that has been shown to be false in the current bear market, where miners have been reportedly scrapping mining rigs. Security tokens aside, many believe that the current coins and tokens don’t carry the same sense of ownership and/or returns that equity, loans and other assets may offer. To address this problem, ideas from other areas

This article was written by

BioTrench profile picture
Background in biomedical looking for interesting opportunities.Focus on biotech, with the occasional foray into crypto, tech, and other areas.All written works are an expression of opinion and should not be interpreted as investment advice.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Of the mentioned cryptocurrencies, I/we may have some BTC dust sitting around on some exchange.

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