Altcoins Talks - Cryptocurrency Forum
Cryptocurrency Ecosystem => Other Popular Cryptos / Coins => Cardano Forum => Topic started by: astroboy on December 03, 2020, 08:59:28 AM
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Where drives the value of the coin?
If we put the day trading to one side, what forces dictate the value of ADA?
If we look at regular principles of supply and demand, I make the following observations:
Supply
- Max supply at 45 BN (for now, can this be changed by popular vote in governance cycle?)
Compared to other coins, this is on the higher end, increasing supply
- Reduced by staking pressure - holders want to stake as it earns them coin, locking up supply from the market
- Increased adoption will lead to reduced supply
Demand
- Interesting use case that spans multiple blockchains and use cases
- Staking rewards increase demand
- Low transaction fees
So as we know, when Supply is greater than Demand, the price trends down, and vice versa.
My evaluation is that the whole business case for using the Cardano platform relies on low transaction fees and interoperability.
Low fees
Low transaction fees should increase demand and reduce supply, since more people will want to get hold of ADA to use it in their opertions, with the fees being skimmed through to stakers to lock up in stake pools.
Interoperability
Likewise, the more uses that ADA has, the more people will want to hold it to use it, resulting in the same flow of supply as above.
So as a non-business holder, should my strategy be to amass ADA and sell to those who need to use it for critical business functions?
Some issues I have with my above reasoning:
- Low transaction fees would surely reduce the risk/reward ratio for stakers, reducing demand from the blockchain validator side
- A maximum supply is a risk to businesses who choose to operate on Cradano. As adoption increases, supply decreases and it becomes more expensive to operate using Cardano. Business that are highly susceptible to unit economics will run away from that. Compare that to fiat currencies, they have significantly less risk here.
What are your thoughts on the underlying value of holding ADA? Do you agree with my reasoning above?
I'd like to hear from you all, I think these considerations are important for long-term holders and believers of DLT as, when the market becomes more widely adopted by the business world and markets become less volatile, this will ultimately drive the value of any coin.
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All of these threads have knowledge of Cardano so I think the original story of Cardano is complete.
Why Cardano has such good value is because many traders buy Cardano.
With that simple and easy way, Cardano already has the value of all traders because Cardano unconsciously has large Buy Orders from various investors.
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All of these threads have knowledge of Cardano so I think the original story of Cardano is complete.
Why Cardano has such good value is because many traders buy Cardano.
With that simple and easy way, Cardano already has the value of all traders because Cardano unconsciously has large Buy Orders from various investors.
Yes thread is so useful and i have found a good information behind the real value of ADA .I think trader are not making the price high it actually depend on the project .The ADA has a strong platform and it has a huge community .It proves that how much the platform is strong .It still a great opportunity to buy ADA in cheap price .
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I think everything can be read in the whitepaper on the strengths of Cardano and why we should buy Cardano.
Maybe basically all the coins can be known from the vision and mission in the whitepaper, even Bitcoin has a whitepaper which is now being disguised by various cryptocurrency lovers to provide interesting things for the altcoins that will appear.
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I think everything can be read in the whitepaper on the strengths of Cardano and why we should buy Cardano.
Maybe basically all the coins can be known from the vision and mission in the whitepaper, even Bitcoin has a whitepaper which is now being disguised by various cryptocurrency lovers to provide interesting things for the altcoins that will appear.
I have read their whitepaper and it fascinated me alot. I didn't study a lot but recently i am trying to keep update of Cardano's pros and cons. A lot of new investors are investing in ADA for its upcoming well planned developments. Hardfork successfully completed for smart contract development. We will receive its positive impact soon.
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All of these threads have knowledge of Cardano so I think the original story of Cardano is complete.
Why Cardano has such good value is because many traders buy Cardano.
With that simple and easy way, Cardano already has the value of all traders because Cardano unconsciously has large Buy Orders from various investors.
Yes thread is so useful and i have found a good information behind the real value of ADA .I think trader are not making the price high it actually depend on the project .The ADA has a strong platform and it has a huge community .It proves that how much the platform is strong .It still a great opportunity to buy ADA in cheap price .
Yes i agree with you, Ada price right now really cheap & it will be growing up day by day. Many people’s love this project & creat a good community already. So big achievement wil be coming in near future. & i am also good wisher as a ADA lover.