When Bitcoin was first introduced, the idea was to create an alternative currency for the people. It would be money that couldn’t be influenced by governments, politics, or socioeconomic status.
At first, the experiment seemed to be working. Then people began to notice that the value of a cryptocurrency could increase thanks to its natural deflation mechanisms. That made it an interesting investment, which is a trend that still continues today.
With NewYorkCoin (NYC), the goal isn’t to differentiate the perspective of investors who are interested in what cryptos provide today. It is to return to the heart of what the modern cryptocurrency is supposed to be, while acknowledging that it can still have a dual role.
A cryptocurrency is cash. It is an investment. It is not equity.
How Do We Define Value?
The value of any commodity, whether it is centralized or not, is how it is perceived by those who are using it.
You might find corn to be worthless. You hate how it tastes. For the ethanol producer, however, corn is a treasure. It has no value to you. It has tremendous value to the producer, who will create fuel from it.
An investment must create and capture value to be effective. That value is based on the size of the market and the percentage which is hoped to be captured. Although these figures are often treated independently, it should be viewed as one metric.
Why? Because you might hate corn, but you love being able to purchase ethanol for your vehicle.
That means you actually love corn. It just needs to be turned into a commodity that has value to you in the first place.
This is where NewYorkCoin is able to set itself apart from other cryptocurrencies. It creates multiple levels of value that make it appealing to a broader market base.
From a purchasing standpoint, the transaction speeds of NYC are up to 20 times faster than what you will find with Bitcoin. At the same time, almost every single transaction initiated with NewYorkCoin is free.
From an investment standpoint, there is plenty of potential to consider as well. It offers a market cap of more than $5 million, an engaged community, and a roadmap that will bring additional differentiation.
How Do We Capture Value?
Here is where we must eliminate equity from the equation. That is because equity is a contract which gives stakeholders control over a balance sheet. If you own 40% equity in a commodity, then you own 40% of its total value.
Maybe it’s semantics to some, but no one has a 40% equity in Bitcoin. You might have 40% of your investment portfolio in Bitcoin. That’s different.
Image Source: KCLau
The goal of equity is to generate profits by increasing the value of the overall structure being analyzed.
If you own 2% of a company valued at $10 million, then your equity is valued at $200,000. If the company valuation goes up to $20 million, then your equity is valued at $400,000.
NewYorkCoin, and every other non-company cryptocurrency, captures value in a different way. It comes through a decentralized infrastructure which solves specific problems for its users.
We capture value by eliminating many of the threats of identity theft that happen in a standard fiat currency transaction. These pseudo-anonymous transactions, recorded on the blockchain, reduce the threat of chargebacks to consumers. The fees are eliminated in virtually all circumstances.
That means NYC makes it more profitable for businesses owners because it eliminates the transaction fee, along with the threat of product and revenue loss.
It is also valuable to the consumer because a data breach won’t expose their personal information. It will simply expose the nature of their transaction.
That covers value from a monetary perspective. What about an investment perspective?
Anything that holds value must also hold scarcity to be something that an investor would want to put into their portfolio. There must also be demand available to increase the value of the product because it is offered in a limited supply.
Image Source: Maximumble by Chris Hallbeck
All cryptocurrencies provide this trait on some level. Government-backed currencies can be printed on-demand, its value dictated by currency comparisons and investors looking to create value changes.
Cryptocurrencies follow this same trait at some level. That’s why Bitcoin is valued much higher than NYC.
At the same time, however, there is one truth that cannot be denied. Investments require profit. Anything of any value can create profit, which is why investors look at cryptocurrencies. It isn’t profit through equity.
It is profit through worth.
How Cryptocurrencies Stay Active in a World of Cash
For money to have value, the market cap must either stay the same or increase in value. If the market cap goes down, then your money loses value, which means it costs more to purchase the things you want or need.
That is why all currencies are classified as an asset. It is not a productive asset, however, because you are fully dependent on the actions of others to maintain or improve the market cap.
You could burn your cash in the fireplace to consume it. A better option would be to exchange it for something you want, in the way of goods or services.
Source: John Atkinson, via Pinterest
Cryptocurrencies provide the same benefit. You’re not going to delete your wallet when it is stuffed full of NewYorkCoin. You’re going to look for ways to exchange it.
Anything that is classified as money has value because people believe it has value. Without that belief, there is no value.
Cryptocurrencies like NYC are able to stay active in a world of cash because of this belief. Someone demands it as an asset to exchange in trade for what you want. When more people demand it, the value of it rises.
How Does a Cryptocurrency Increase in Value?
We can once again look at how traditional currencies build in value to understand how cryptocurrencies build in value.
Let’s compare the U.S. Dollar to the Canadian Dollar.
As you can see, over a 10-year period, the U.S. Dollar has a high of $1.31 against the Canadian Dollar, while having a low of $0.94.
That’s right. For most of 2011, Canadian money was worth more than U.S. money.
There is a 3-step process which creates value within a currency.
- Investment. People must be willing to speculate with the currency because they are attracted to it for some reason.
- Utility. The currency must be able to provide something that you need.
- Need. It must be something that other people will use besides you. It must also be able to guard against future market uncertainties.
Any currency, including a cryptocurrency, which follows this 3-step process will generate value. The amount of value it generates is based on how effectively it traverses each step when compared to other currencies.
From 2011-2013, more people felt that the Canadian Dollar traversed those steps better than the U.S. Dollar. That gave it more value because it was wanted more often.
Now the reverse is true.
That principle applies to cryptocurrencies as well. Bitcoin is seen as being the most effective to traverse these steps, which is why it has the most value.
People tend to gravitate toward what other people are doing. It’s the bandwagon effect.
We must separate the value of an asset from the rest of the market. If you are only investing in what other people think is valuable, then you’ll never find wealth.
The people who invested in Bitcoin during its Silk Road years are buying Lamborghini’s. The people who invested in Bitcoin when it was valued at $12,000 per coin have lost 50% of their value.
A cryptocurrency increases in value at first because intelligent investors have recognized an opportunity and are ready to act upon their thoughts.
It explodes in value when the bandwagon effect happens.
It’s that simple.
You don’t need to worry about a huge initial coin offering portfolio, creating word-of-mouth buzz, or argue about developer activity.
What you need to do is identify an active community. You need to see if there are engaged investors present. Then you must look to see if there are users who are accepting the cryptocurrency in exchange for goods or services.
That is why NewYorkCoin deserves a strong look. It checks off all the criteria in the first step of the process. It is building toward the fulfillment of the second and third steps.
Developers and Investors Must Work Together
Wealth is the key to the valuation of any currency, fiat or crypto. Without wealth, there is no market cap.
That means if any cryptocurrency, much less NewYorkCoin, is going to make a permanent impact, we must be able to appease the developers and the long-term investors.
Both groups provide value to a cryptocurrency. With over 1,600 cryptocurrencies in the market and more being added constantly, those with the most wealth and the largest holder bases will remain.
The rest will likely disappear or be lost to the obscurity of a niche market.
Developers are responsible for creating a currency that is objectively better. That doesn’t mean it will overtake an inferior currency. Just look at the current market capitalization values right now.
40% of the top 5 market capitalization values have a cryptocurrency trading below $0.30 as of August 2018.
On any given day, would you rather have 1 XRP coin or 1 Bitcoin Cash coin? Seems like an easy answer, doesn’t it?
Only if you’re looking at the trading value of the cryptocurrency.
Developers get paid from their cryptocurrency when they create something that investors will want to use. Investors benefit from holding a cryptocurrency which is backed by a dedicated team of developers which are invested into creating a world-class product for them.
That’s why so many cryptocurrencies will ultimately fail. There is too much reliance on one voice.
If investors are dictating the actions of miners and developers, then there is an inconsistent voice being offered to the cryptocurrency community. Investors have one wish: to maximize the value of their portfolio.
Their advice will be based on their personal needs.
Developers go in the other direction. If they insist on taking a specific direction with their cryptocurrency, then they can make it an unattractive product for investors. That means they might have an outstanding cryptocurrency, except no one wants to use it.
Both voices are important. Compromise is often necessary. That is why the development of a long-term roadmap is a key to success for the modern cryptocurrency.
That is what you’ll find with NYC.
How NYC Moves Forward
When you look at the plans of many other cryptocurrencies, they seem to have one goal in mind: become a disruptor of Bitcoin.
No one is going to take down Bitcoin in the conceivable future. The bandwagon effect is in full force. Even though the value of each coin has been reduced from its highs of near $20,000, you won’t find another cryptocurrency even close to the value of it right now.
Taking on the industry giant can feel exciting. It can also be a lot of pointless work.
A better option is to find your own space in this market. To find ways to work together with other cryptocurrencies, investors, and developers to provide value in other ways.
No one gets a free ride. We all need each other to make things work. A community is required to bring value to a cryptocurrency.
That is why NewYorkCoin is building toward a bigger, brighter future. The emphasis goes beyond the currency itself.
We have committed developers. We have engaged investors. We have a growing community of businesses that are accepting NYC at the point-of sale.
The value of NYC is continuing to grow. When we’re on the same page about how we define value, you’ll find that few cryptocurrencies offer the same potential as NewYorkCoin going forward.