Topic: What are altcoins backed by? - page 3. (Read 375 times)
Just take them as utility coins or we can say that they only represent the project or technology and there is no other rights like profit share or decision making of the project like we see in shares but then again we have seen altcoins gaining massive growth in value mostly because of popularity, use cases and adoption.
Well must of the altcoins are back by one project and products and the other most of them are loyalty reward system which can be convert into one product or the other except for some altcoins that have no working product to support them.
Crypto currencies were backup up by nothing because it has value from demand and supply just like the thing as gold you were mentioned and really USD not backed by by gold for now but initially government calculated the USD based on their gold storage.
To explain more, for e.g., we hear that the USD was backed by the convertibility of this currency to precious metals until 1971. Now, what are altcoins backed by such as Ethereum or Litecoin? Are mathematical calculations performed by ASIC miners any useful in the real world?
No they are not backed by calculations made by asic miners in the world.Altcoins are backed by the project itself, the idea worth money and that is what we are willing to pay for.
People buy bitcoins because they want to buy something with it, they buy bitcoin because they feel the price will go up, people buy bitcoin because they want to send money to someone and it costs too much with western union. Basically bitcoin has utility that people are willing to pay for and that is why it has a price.
Ethereum is just like the same, people want to play games on dapp so they buy it, people want to use the blockchain to create ICO so they buy it (and fund the ICO) people want to use the blockchain to improve a identity government branch so they buy it. Basically all coins have some utility and their price reflects that utility for it or the support of people for that coin.
USD was backed by the government and they are the one that gives value to it. They create value to whatever they think is valuable of something just to let the people start using it. I'm not an economist and my opinion on this, altcoins are backed solely on its market cap I mean most of the crypto's. It can be a support from the its community or the miners who have been mining that coin. Depends on the person you ask and on how he sees the value of that specific altcoin.
To explain more, for e.g., we hear that the USD was backed by the convertibility of this currency to precious metals until 1971. Now, what are altcoins backed by such as Ethereum or Litecoin? Are mathematical calculations performed by ASIC miners any useful in the real world?
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