A Cryptocurrency is a digital currency produced by a public network, rather than any government, that uses cryptography to make sure payments are sent and received safely.
It is a fully decentralized, digital currency which is not issued by central banks and bank policies do not define their values. Unlike regular currencies, where new money can be introduced according to the money supply as central banks previously set monetary policy. Cryptocurrency prices are based on supply and demand, and anybody can produce digital currencies.
What determines the value of a cryptocurrency?
The technology behind Cryptocurrency plays a crucial role. Decentralized currencies are resistant to be tracked or controlled, and more, it is nearly impossible just to shut them down.
- Supply and demand
- Mass adoption
- Cryptocurrency Fork
- Production cost
- Inflation of fiat money