12 septiembre, 2018 0

Value and price of a crypto, are they the same?

Value and price of a crypto, are they the same?

When we’re learning about cryptos, the first thing we investigate is their price or value. Being this way, many are the people that use this words without distinction. Nonetheless, their economic concept is completely different, and being this way, they’re not used the same way. Even when in practice the ignorance of these definitions doesn’t have much impact, in the theory it does. That’s why we have decided to explain what’s the value and the price of a crypto.

Value and price of a crypto, are they the same?

Price

We can understand the price of something as the needed amount to adquire that something. In the case of a regular economy, we’re talking about things, goods, services or other goals. In the case of cryptocurrencies, is the needed amount o money to adquire an unit of a crypto. This way, the price of Bitcoin is USD$6.274,57. These would be the amount of money needed to get an unit of a Bitcoin.

The price of a good, or a crypto, usually is found linked to its offer and suply. For it to exist a transaction of this good, the price must be accepted by buyers and sellers. This way, if there is no acceptance, there cannot exist a balance between buyers and sellers, and as a consequence, the price may drop.

Even when it’s not the only factor that can alter the price (its speed, mining consumption, among others), we can say then that the price of a cryptocurrency is born largely because of the buy and sell from users.

Value

We can understand the value as the quality that a good or service has that makes ir desirable for the public. This way, a something has a value on the market to the extent of it being useful, valuable, functional for a person, or pleases their needs. In the case of a cryptocurrency, these will have a value when its usability rises on the market.

Being able to buy with cryptos, sell them, save with them, use them to pay tuition, their level of safety, these possibilities that give more use and validity to cryptocurencies in the economic enviroment. This way, the more a person can do with these cryptos, the more value they’ll have. Now, economists distinguish between two types of value: value of use and value of change.

The value of use its determined by the possibility of satisfying a need. The value of change is given by the exchange susceptibility for other goods, added to that value of use. That’s why the valueof Bitcoin is the highest, because its usability is very high and practically accepted worldwide. This way, cryptocurrencies try to find ways to rise their value.

Conclusion

We can conclude then that the value and the price of a cryptocurrency are different concepts. While the price is the amount of money that you require to buy a crypto, the value of it is the usability it has and the possibility of satisfying the need of people. Even so, the value of these can impact on the price of a crypto, and viceversa.

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