Cryptocurrencies are dominating the current global financial market and their dominance is likely to increase in the upcoming future. The popularity of cryptocurrencies is attracting a whole lot of big as well as small investors, interested in making a good amount of bucks, to invest in the sector. A bulk of these investors, prior to investing in a particular cryptocurrency coin, check for the hype associated with the same. More popular is a digital coin, more investors will be interested to invest in the same. But, is hype the sole factor in determining the investment worthiness of a cryptocurrency? What are the other qualities to look for before investing in a particular cryptocurrency? How Dagcoin has all the qualities desirable from an ideal cryptocurrency? We are going to attempt to answer these questions in this post.
Elements that Make a Cryptocurrency Worthy of an Investment
- Demand for the Cryptocurrency
The value of a cryptocurrency coin is determined by its demand. More the demand of a coin more will be its value. However, for a coin to create demand for itself, it must possess certain traits as well. These traits will help develop a demand for a particular cryptocurrency. So, hype, indeed, has a role to play in exhibiting the investment worthiness of a coin; but keep in mind that there are certain elements, discussed below, which are useful for a coin’s life and these elements are responsible for developing a hype or a demand for a particular cryptocurrency in the financial sector. Hence, relying solely on hype, prior to investing in a cryptocurrency, is never a good idea.
- Transaction Cost Involved
You require shelling out a certain amount from your transaction towards transaction cost in case of a digital coin. It goes without saying here that a cryptocurrency with low transaction costs is likely to attract more users. However, the problem with blockchain based cryptocurrencies is that as the number of users involved increment, same happens with the transaction cost as well. Taking into account this issue Dag-chain, an alternative to the blockchain, was developed. What is dag? Well! Dag-chain can be compared to a blockchain; however, the transaction costs involved for a cryptocurrency based on Dag-chain, like Dagcoin, remain the same throughout its lifetime. This is because in a Dag-chain confirmation of a transaction depends on the transaction itself. Hence, there is no need for the support of external miners for the same. This keeps the transaction cost to a bare minimum and constant. Moreover, the confirmation time for a transaction only gets better with more number of users.
So, if you are looking to make some investment in the cryptocurrency sector Dag-chain based cryptocurrency, like Dagcoin, exhibit a better and a brighter future as compared to the traditional blockchain based coins.
If a coin has, absolutely, no use in the real world then investing in the same is a complete waste of time and money. This is because nobody will be interested in purchasing a coin which cannot be used as a cash alternative. Yes! Investors, indeed, will be present. But, you need to keep in mind that non-investors, who come forward and show interest in utilizing the coin, form a bulk of the pool that aids and assists in incrementing the demand of the particular cryptocurrency coin. Dagcoin has an associated business platform termed as DagPay which can be efficaciously utilized by all kinds of businesses to accept Dagcoin as a mode of payment.
- Community Behind the Coin
If a digital coin has only its developers talking about it and promoting the same the acceptance of the coin will, indeed, come in very slow and sometimes even the project can be shut down. Hence, before investing into a particular cryptocurrency it is wise to check out the community behind it. If the community of a particular coin has an immense number of followers including developers, investors as well as users of the coin; it becomes clear that the particular digital coin has better prospects of rising in stature and maintaining its position in the global financial market. Again, Dagcoin excels in this as it has a flourishing community of developers, investors and users behind it.
Please note that these are only some of the major factors that determine the investment worthiness of a cryptocurrency. Also, these points must not be taken as an investment advice but simply a personal opinion on the matter. Carrying out your own research is pretty essential before going for investing in a particular digital coin.