With a variety of different businesses making profits out of the Cryptocurrency around the globe, why is that there Is a huge sized list of cryptocurrencies dying every day.
From Cryptocurrency creators, web application sellers, to companies trying to acquire venture capital for vaguely-described synergies involving the retail use of cryptocurrencies to the ones who hold conferences on ‘how to get rich on cryptocurrency’. Practically billions of dollars worldwide have poured into crypto.
Thus far, cryptocurrency is failing, severely. The vast majority of cryptocurrency has already ended up listed at http://www.deadcoins.com and even the flagship best-of-class Bitcoins have lost 80% of its value in the last year. Despite the continuing hype for crypto, seemingly every day makes it look worse as both an idea and an investment.
To understand why crypto is failing, it is necessary to understand what crypto really is…
Cryptocurrency Is Not A Revenue-Making Asset. Unlike a stock whose value can be determined by earnings, cryptocurrency provides no income stream to its holder. While some owners like to think of themselves as “owning the technology”, nothing could be further from the truth since they earn no royalties if somebody else is using that technology. Because crypto has no earnings that mean it has no P/L ratio by which a rational price can be established. Crypto isn’t even as good as a zero-coupon bond, however, since it has no maturity date when the principal will be returned.
Cryptocurrency Is Not Value Store. Some experts have claimed that crypto is a “store of value”, meaning that if you put $1,000 of value into crypto today, then in the future you will be able to get your $1,000 of value back by selling the crypto. That’s not the way it works in reality, however, because cryptocurrency is so unpredictable. As mentioned, the flagship Bitcoin has lost 80% of its value in a year, which in retrospect doesn’t seem like a particularly good way to store value.
Cryptocurrency Is Not A Commodity. A commodity is usually not something that is consumed, leading to more demand. Oil and wheat are examples; once a stock of those is consumed, another must be supplied. Cryptocurrency is not a commodity. There is no demand for cryptocurrency in the consumption sense, and an individual unit of cryptocurrency is not destroyed by a transaction but can be reused over and over such that most demand can be met by existing stocks.
Cryptocurrency Is A Currency. Crypto is currency, meaning a medium of exchange. In the past, humans have used everything from attractive seashells to beaver pelts to rare metal coins to little pieces of paper with uninteresting pictures on them as units of exchange. At the end of the day, this is all that crypto is — a unit of exchange that does not exist in the material world but instead exists only in binary code on computer records somewhere. If this sounds high-tech and really ultramodern, then you’d better consider that we’ve had such payment systems for years in the form of debit and credit cards, wire transfers, and services such as PayPal.
