How much is a cryptocurrency worth? Which cryptocurrency? Well not just Tron (TRX), any. Before you answer, please read the question carefully, we’re not asking you for a token’s price but for its value. Confused? Ok, let us explain.
Value and price are not the same things at all. The first one is about how much something should cost; the second one tells you what the market is willing to pay for it. There are valuable things that can be underpriced or overpriced, and there is also expensive junk.
The financial world has known this for centuries which is why it’s developed ways to analyze any market from both points of view. There is something called fundamental analysis. This discipline focuses on assessing the real value of any asset, company, or product. It’s not about price, but about potential, usefulness, chances of mass adoption.
This isn’t the most popular way of doing things because it needs an in-depth study and understanding of any market you want to join, but those who do it correctly (this has been Warren Buffet’s strategy all along) make a killing.
It takes discipline, patience, and knowledge. In crypto, there’s an interesting example of this. XRP is trading at 0.363 USD as we write this, which is very cheap.
Yet, a fundamental analysis carried out recently by a crypto think tank concluded that XRP’s actual value is of 1.7 USD. The reason the market is not willing to pay that much for it (yet) is that it hasn’t understood the technology and use cases that support the value. And there’s another reason too.
The other way to see the market is to focus on price only. That’s called technical analysis. This has nothing to do with value; it’s all about using a set of tools and rules, supported by historical data, that will allow you to surf the market. The objective here is to identify trends, and then ride the wave while it’s there. Then, you get out in time before everything goes down and you drown.
The point is to use price information to make money, and it doesn’t matter if you understand the technology, the product, or the company as long as you have reliable historical data you can use in charts and apply the typical technical analysis tools. This is the dominant way of doing business in crypto, and one of the reasons why speculation runs rampant.
TRON enters Top 3 on Blocktivity 💥https://t.co/ikLpzi3tLl observes the activity on the world's blockchains to see what projects people are actually using
That makes #TRON the world's 3rd most active #blockchain
Usage is the best predictive indicator of value there is 📈$TRX pic.twitter.com/pZqiOJK2XU
— Misha Lederman (@mishalederman) November 27, 2018
So we will paraphrase our opening question: what makes a cryptocurrency valuable? This is, of course, open to debate and we could argue about it until the cows come home. But for this article’s purposes, we will posit that digital assets are no different than any other thing you can buy. They’re as valuable as they’re useful.
The next pertinent question is how do you measure usefulness? This can be a very subjective question, but, fortunately, in the blockchain world, we have an objective measure for this: activity. The most useful blockchain projects have the most users and the most activity which can be quantified regarding the number of operations completed daily.
Ok, after this rather protracted introduction we proceed to give you the day’s news when it comes to completed operations in the world’s blockchains: Tron made it to the top three.
And why does that matter? Because a blockchain that has that many users doing that many operations can only be useful, which translates to intrinsic value, which sooner or later also translates into rising prices.
Tron is trading at $0.014 as we write this article, and alongside all the major coins, it’s in red numbers to the tune of 7.67%, so maybe the market has yet to see it.
Tron is a valuable project that should not be underestimated because of the token’s low price, and this is not an opinion anymore. The number of completed daily operations doesn’t lie.
Image courtesy of Pixabay.
