💲Digital Currencies

What Is Digital Currency?

Virtual currency, also known as digital currency, is a data representation of value that is traded through data. It functions as a medium of exchange, a unit of account and a store of value, but it is not legal tender in any country or region. There is no government authority to guarantee it, and it can only perform these functions through an agreement between users. For example, Bitcoin and Litecoin are digital currencies that rely on checksums and cryptography to create, issue and circulate. It is characterized by the use of peer-to-peer network technology to issue, manage and circulate the currency, theoretically avoiding the approval of government agencies and giving everyone the right to issue the currency.

Influence Factors

Virtual coins can be considered as a commodity, and the price of a commodity is most influenced by supply and demand. The factors that affect the supply and demand of a currency are: supply and demand, energy cost (mining cost), application scenario (project landing), public perception, etc. Take Bitcoin for example. Bitcoin is a deflationary currency and as demand increases, it is bound to cause its price to rise in the long run, so it is not unreasonable for many people to predict that Bitcoin's total long-term trend can reach millions of such statements. Simply put, as long as demand increases, its price trend should rise. That's what everyone keeps saying. As soon as the next incremental volume arrives, the price of the coin will take off again, and that's how it's going to happen.