What makes crypto valuable?
Have you ever thought about how cryptocurrency gains value?
Cryptocurrency show some of the attributes of fiat currency and stocks. They are listed on cryptocurrency exchanges. When the demand increases, the price of cryptocurrency also increases.
Cryptocurrency also exhibits some of the characteristics of fiat currency
Fungibility: One unit is equivalent to another unit
Portability: Crypto can be transferred from one place to another
Here are some more characteristics
Recognizability: People accept and value a cryptocurrency
Durability: Crypto is highly durable and it has a long-lasting form
Each crypto tokens have a different utility. ETH is used to pay services in the entire Ethereum ecosystem, which contributes to adding value to the token. Likewise, SOL is used for payments and to become a validator in the network.
Like fiat, the utility gives token holders access to many services. The value of a token increases when its utility increases.
A new cryptocurrency is created through the process called mining. It is difficult and expensive. Most tokens have a maximum supply beyond which no one mines new tokens. Scarcity increases the value of cryptocurrency.