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Looking into What Makes Cryptocurrency Unique And So Popular

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This article is published in collaboration with Scutify, where you can find real-time markets and stock commentary from Robert Marcin, Cody Willard and others. Download the Scutify iOS App, the Scutify Android App or visit Scutify.com.

What has led to the rise of cryptocurrency over the traditional stock market?
Crypto-currency is the new form of currency that has been dubbed as the next big thing in global financial markets. Crypto-currency just like other currencies that are already in use has value because its users think that it has value. Global currencies come backed up with precious stones such as gold and diamonds while others lack any backing but still have value because of people's belief that they have value and are an acceptable unit of exchange. The idea behind crypto-currencies was to create a unit of exchange that could be used to store assets without people having to rely on the services of central banks.

• The desire by financial specialists to develop a way through which they could store assets without involving central banks.

• Due to its security features. Many financial institutions are prone to cyber-attacks that lead to numerous financial losses and crypto-currencies promise to solve this concern as it uses blockchain technology.

• Supply and demand for the crypto-currencies: Supply and demand affect the prices of many commodities and supplies. Since the introduction of crypto-currencies, the market uptake has been increasing over time leading to the rise in value and usage of crypto-currencies.


• Energy usage involved: Securing of blockchains require intensive use of electricity especially among the proof of work (POW), energy usage is even higher. Estimates have indicated that securing blockchain; it takes energy enough to light up a whole small country.

• The levels of difficulty within the blockchain: When a blockchain is perceived to be more secure and difficult to mine, the value and price attached to it increase and it becomes difficult to mine coins hence affecting the final price on coins.

• What utility does the crypto-currency offer? Utility plays a role in determining the demand for a given cryptocurrency. Crypto-currencies that have many applications have higher demand when compared to those that have limited uses. Crypto-currencies with more utility have a higher price compared to those that are limited in terms of their utility.

• What sort of public perception has been created about a particular crypto-currency? Public perception about a product or service has a bearing on its value and price and crypto-currencies are no exceptions. For instance, Bitcoin has the advantage that the public has a positive perception towards it hence high value and price while others might have to face negative public perception that limits their market penetration.
What are the limitations of crypto-currency?

• Crypto-currencies are very volatile: The idea behind crypto-currencies is a new trend in the financial market and this can ensure that the price of a coin is likely to rise or fall quickly making it a risky investment.

• It is still affected by legal and governmental policies: Since this is a new idea, some governments might be opposed to its use in their countries while oppressive tax laws and other asset laws can cause its instability.

What are the common crypto-currencies in use today?
• Bitcoin: This is the defector reserve currency among the cryptocurrencies
• Litecoin: It was developed as a silver to Bitcoin that was considered as a gold to accomplish transactions rapidly and within a short period.
• Ether: The idea behind Ether was not to create a crypto-currency although it has been used as such. It uses its unique Proof of Work (POW) hashing algorithms and rules that act as a token within the Ether network to accomplish computer codes in a verifiable manner. Right now this is the quickest growing currency which has led most buyers to look up the investment potential in ethereum vs bitcoin.
• Unobtanium: This was designed to be a rare crypto-currency and has been capped at 250,000 coins. Unobtanium came into the market as an innovation of its own although it did not attract prices just like other currencies and time can tell its success.


This article was written by Adam Monson for on .

This article published in collaboration with Scutify, the best app for traders and investors. Download the Scutify iOS App, the Scutify Android App or visit Scutify.com.

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