By Oxford Dictionaries, value means the regard that something is held to deserve; the importance, worth, or usefulness of something.
And, now that we’ve made that clear, let’s dive deeper into the subject of cryptocurrency value. The question is: what is it based on? How does it accumulate?
Dagcoin’s primary purpose is to create something that brings out the actual benefits of cryptocurrency. And that is: to be a currency that people can (literally!) use. Globally, everywhere they are at that given moment, and whenever they want.
To be able to achieve that, the price has to be stable. We believe that the currency can be valued based on supply and demand but only when it has established itself. A stable currency means that the community behind it is massive, i.e., global.
The bottom line is that cryptocurrency should be built up the same way as fiat money is, at least value wise. The price should be tied to something measurable, understandable and logical.
So, looking at the bigger picture, what is the value of dagcoins determined by?
The people using and holding it. The community.
The merchants who accept the currency. Because, if we want to use the money daily, we need merchants, shops, and vendors.
The ecosystem aka all of the possibilities we can do with the currency, i.e., investing, traveling, going about our daily business, studying, etc
.
Initially, the three factors are the ones that define the value of the currency. At a later stage, a fourth contributor to the price enters the scene. It’s called usability. It means the number of transactions made. And we mean real deals, not the ones on the exchanges. Transactions made between people and merchants.
The true power lies in the community
The problem is that the world is just not ready yet. Right now, it’s way too early for cryptocurrencies to go mainstream. The ecosystem and the infrastructure are not there yet
As we see it, it could take a few years for countries with a more open approach. For some, it could be around 10 and for others even 15-20 years.
But there’s a solution: the bigger the community grows, the more valuable the currency gets. It’s not about how much money people put into the currency; it’s about the number of people. A strong community is not created by one person who invests 100 million into a cryptocurrency but by a lot of people who buy, hold and use the cryptocurrency.
So, once again: it’s not about the money, it’s about the number of people.
Then there are the merchants. All the places, i.e., shops and service providers where we can use the coins. The merchants and users go hand in hand: the more people there are, the more merchants there will be. And: the more merchants there are, the more will the users see that they can actually use their digital money.
So, it’s kind of like a snowball effect: one drags along another one and so forth. A classic win-win situation. We rest our case.
And then, of course, the ecosystem. We believe that whatever we can do with the fiat money, whatever ways there are to use it, the same things we can also do with cryptocurrency. We’re focusing 100 percent on creating the most usable and the easy to use cryptocurrency there is.
The value = the magic three aka all of you
More users make a community which means higher value. And vice versa: fewer users means that the value drops. More merchants accepting the currency brings the value up, and fewer merchants take it down. Further possibilities (the ecosystem) to use then coin increase the value and fewer chances drag it down.
And, as a conclusion: if the value is based on supply and demand, it’s easy to affect and manipulate the price. But, if it’s based on fundamental measurable benefits, it cannot be manipulated. And that, I believe, is the key to creating a stable currency. Showing that it’s something we can all use.
It’ll attract more people to support the coin, support the whole project, and the mission. It will prove to be something we can put our effort in, and do it for the long run.
Those are the three factors affecting the price. The above should give an understanding of how the currency is valued. Read about who your money belongs to and what are the disadvantages of cryptocurrency.
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