CryptoCurrency Value Drivers

Determinants of Value

Broadly speaking there are six main categories that give a cryptocurrency its value.

Underlying Blockchain Technology

How well does the underlying blockchain technology lend itself to broader applications? For example, Ethereum has become successful because of the smart contract technology it offers up for use in a broad array of other applications.

Usage

There needs to be acceptance on behalf of individuals and businesses for the usage of the coin in trade. The coin will never gain value unless people are willing to accept and trade in it.

Infrastructure

There must be infrastructure in place that allows for the use of the coin and the fulfilment of its concept. Without this, there will be no demand for the coin and value will suffer.

Concept

The purpose for which the coin was created must be unique and offer some value. Without an appealing concept a cryptocurrency can simply get lost amongst the crowd. A great example of this would be the currency “GameCredits” which was created specifically as a way to purchase online gaming.

Active Admin

Does the coin have an active administration and development team behind it that are driving its continued evolution and success?

Community Support

Particularly in the early life of a new cryptocurrency there needs to be a strong, well advised and active community of people that support the coin and believe in it.