With so many cryptocurrencies, why do any of them have value?
A financial report this week celebrated the launch of yet another cryptocurrency, this time a new LGBTQ-focused coin that aims to “fight against homophobia.”
If it takes off, the maricoin, a name which, as Reuters reported, is derived from a Spanish language homophobic slur, may be the kind of niche token that will survive in a very competitive field. Its founders hope so.
With fortunes having been made by many who have introduced coins of their own, there is certainly plenty of competition. But for people turning their hard-earned money into crypto tokens, that raises a bothersome question.
Even if crypto tokens really do have a use and a real-world value — something that remains disputed — and if those tokens can be reproduced infinitely, which blockchain mathematicians say they can, why are so many being traded as if they were in short supply?
As cryptos proliferate, informed sceptics worry a nose-dive could destabilize conventional markets.
Is there really a shortage?
The supply of any one crypto, such as bitcoin, may be limited by the algorithm that generates the tokens. But if you need something that acts like a bitcoin, say experts I interviewed, there are plenty of choices.
According to CoinMarketCap, known as a credible source for crypto data, at last count there were 16,394 different crypto tokens trading on 451 different exchanges, valued at something over $2.2 trillion US.
For whatever reason, maricoin had not yet made the…
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