LogFAQs > #950380890

Forceful_Dragon posted...

Not true of all coins.

Take Stellar Lumens (XLM) for example. Stellar is an app that can be used to send currency to other people for a fraction of the cost of traditional money wiring and much faster. Rather than charging their fee for this service in any particular fiat currency their fee is charged using their own coin. As a result there will be a regular demand for this coin that rises and falls with the popularity of the apps usage.

BNB is the same. It's the Binance coin that can be used to pay the fee for trades on Binance at lower than the standard rate (0.075% instead of 0.1%) so there will be a demand for the coin if only for that reason.

And you could argue that those coins have the potential to lose all their value as their marketplaces become less relevant and that is true. The same way a stock can lose its value if a company goes bankrupt or a fiat currency loses value if a country dissolves or adopts a new currency.

I think I accidentally deleted this line from my initial post. I wanted to say that I personally think blockchain technology itself is greatly valuable but none of the coins themselves are. As soon as banks start using the technology most of these quick transfer programs with a small fee attached become obsolete cause you can just do the same thing through your bank.

Comparing cryptocurrency to a stock is unfortunately not the same thing in the slightest. Stocks in the long term are based on a underlying companies valuation as well as expectations for future valuations. (This isn't a perfect thing however. There are short term outliers and people with unrealistic expectations for a company. But at the end of the day if a company makes more and more money its going to be worth more and more. If it makes less and less money its going to be worth less and less.) A cryptocurrency is not based on any underlying thing. It's based merely on the prospect that someone will buy it for more down the road.

Now I don't think cryptocurrencies are worthless. I expect at least 1 or 2 to survive for quite a long time as an asset. But I personally have no idea which and have no desire to get involved.

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DPOblivion beat us all.