Engineer,IBM | Posted on | News-Current-Topics
fitness trainer at Gold Gym | Posted on
Let’s understand one
thing—you cannot put all virtual currency in the same basket. There are several
distinctions between
them—some are centralized, others decentralized; some process transactions very
fast, others lag.
Let’s take an example
here—Bitcoin and Ripple. Bitcoin is finite in number (21 millions). However,
the
supply of Ripple is
infinite (at least for now).
Now coming to your
exact question, the value of virtual currencies largely depends on the demand
and
supply. It’s basic
economics! If something is limited in supply, its demand will be high. And when
its
demand is high, so
will be the price. However, if something has unlimited supply, its demand will
be
relatively low, and so
will be its price.
So, thanks to limited
supply, Bitcoin is highly demanded. So its price is skyrocketing, touching
nearly
$20,000 in the first
half of December. People want more Bitcoin, so they are ready to pay more for
the
units.
On the other hand,
ripple has unlimited supply. So per unit, its value is less than $3.
Of course, on this
scene, many factors come into play. But at the end, they all influence demand
and
supply, which then
sways the fate of these virtual currencies.
Same theory is
applicable for all cryptocurrencies, be it Bitcoin, Ripple, Ethereum, Bitcoin
Cash, IOTA,
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