How Is The Value Of Cryptocurrencies Determined Training Ppt

Slide 1

This slide lists factors affecting the value of cryptocurrencies. These are supply & demand, node count, cost of production, cryptocurrency exchanges, competition, internal governance, and regulations & legal requirements. 

Slide 2

This slide talks about the first factor that impacts the value of a cryptocurrency, which is demand. Cryptocurrencies get their social significance from widespread acceptance and use as a means of exchange. As a coin's utility improves, so does its demand, which boosts its worth.

Slide 3

This slide depicts Node Count as a factor to determine the value of a cryptocurrency. Node count refers to the number of active wallets on the network that can be seen on the internet or a currency's webpage.

Slide 4

This slide depicts the cost of production as a key factor in determining the value of cryptocurrency. To mine cryptocurrency, participants invest in costly equipment and electricity. The cost of mining cryptocurrency rises as more powerful equipment is needed to complete the task. As mining expenses increase, the value of the cryptocurrency must increase to make mining a viable activity.

Slide 5

This slide demonstrates the role of cryptocurrency exchanges in determining the value of a cryptocurrency. More exchanges listing a cryptocurrency can increase the number of investors ready and able to acquire it, increasing demand and leading to an increase in price as well.

Slide 6

This slide highlights competition as a key factor in impacting value of a cryptocurrency. If a new cryptocurrency develops momentum, it reduces the value of the incumbent, causing its price to fall as the new currency's price rises.

Slide 7

This slide depicts the role of internal governance in determining the value of a cryptocurrency. Cryptocurrency networks don't usually follow a set of rigid rules. Developers tailor projects according to the needs of the community.

Instructor’s Notes: Ethereum, for example, is attempting to switch from a proof-of-work to proof-of-stake system, thereby rendering most of the expensive mining equipment in data centers and people's basements worthless. Ether's value will be hit as a result.

Slide 8

This slide showcases the importance of regulations in determining the value of a cryptocurrency. Regulation makes it possible for investors to take short positions or bet against the price of cryptocurrencies via futures contracts. This should improve price discovery and lower the procing volatility of cryptocurrencies.

Instructor’s Notes: Regulations may also have a negative impact on cryptocurrency demand. If a regulatory agency modifies its laws to discourage cryptocurrency investment or use, the price of cryptocurrencies are also liable to fall.