It is pretty safe to say that we are still very early in the life of cryptocurrencies. The past few weeks alone have seen the price of Bitcoin go up or down by nearly $1000 within a short period of time. It is these big fluctuations that bring many people into cryptocurrencies and trading. As the possibility to potentially earn big money quickly really exists. However, at the same time, the possibility to lose huge amounts of money quickly is also there.

Today, more people than ever are aware of cryptocurrencies and the potential they have. For those that want to begin using or trading with them, it has never been easier to exchange fiat currencies for crypto and vice versa, and this is getting easier and quicker all the time.

As more and more people start using crypto’s – as we have seen so far – the value and possibilities people have when using also them increases. But just what is the true value of cryptocurrency, how far can it go, and what problems do we need to overcome to reach the great potential that crypto has.

We will attempt to answer these questions in this week’s blog.

The Costs of Massive Price Fluctuations

We mentioned above how in the last few weeks the Bitcoin price has fluctuated by as much as$1000 in a short period of time. By taking a current price of around $8000, this is a price change of 12.5%in just one day. Imagine if you walked into the supermarket and suddenly all the products had risen that much from the day before. Outside of extreme cases of hyperinflation like what is being seen in Venezuela at the moment that just doesn’t happen.

So, for retailers and business owners alike, they take a huge risk when buying or selling the stock with crypto at the moment. As although they may buy stock one day that they can sell for a much higher amount the next, they also run the risk of losing a lot of money too. It is this risk of losing that makes businesses very cautious to accept crypto payments, or buy/sell products or services using them.

For the vast majority of individuals who are yet to start using cryptocurrency, the main reason is the fear of losing money. Just imagine having your life savings in Bitcoin as it tumbled from nearly $20,0000 to just below $3000. All that hard earned money, along with the dreams of nice long holidays abroad, helping kids on to the housing ladder, or grandchildren to pay for university, all up in smoke. But it could be even worse, not being able to pay the bills, put food on the table or keep your home.

Even for those actively involved in the market, there are huge costs too. As prices rise people become more active, crazy promotions are offered and ridiculous promises made that are just not realistic or true. At the same time, as the price falls, people become scared and cautious. Both of these actions drive the markets to fluctuate more and confirm the fears of businesses and individuals alike.

A Better Way

But just how do we reduce these big market fluctuations and encourage more people to start using crypto? We believe that cryptocurrencies should be treated in the same way that we use regular money, and not as a commodity to be traded.

With cryptocurrencies today – like Bitcoin – their value is based on how much they are traded, and the supply and demand. We believe that a crypto’s price should be based on how many users are using the coin and how many merchants accept the coin. The more possibilities there are to use the coin and the more people holding it – the more valuable it becomes.

The strongest indicator for evaluating a cryptocurrency is usage – the number of transactions performed with the coins. It is important to emphasize that this does not include transactions done on exchanges (trading platforms), but completed in real life, such as sending funds between people and purchasing goods or services from merchants.

What Lies Ahead

We mentioned earlier how as crypto prices increase many sources and individuals make crazy promises or offers about the future. That is why it is important to look into the future with a realistic and balanced mind.

It could take a minimum of four to five years before using coins truly makes sense – where cryptocurrencies come with an infrastructure that enables them to be used to buy anything and everything you need on a daily basis.

With this infrastructure, it will be much easier for merchants to begin accepting the coins. They won’t have to create custom solutions at great cost or time. These will simply be plug and play. At the same time for individuals, the increasing possibilities of what you can do with cryptocurrency will bring more people to the market.

As more businesses accept cryptocurrencies and more people start using them, the prices of coins will begin to stabilize. Real stability will come when large numbers of people are using them on a daily basis.

This is why Dagcoin has been created from the start with a focus on building and providing the infrastructure that merchants need to buy and sell goods or services with the coin. Dagpay enables you to accept Dagcoin payments in your virtual or physical shop as well as to create invoices with a unique QR code. Creating the coin in this way with a focus on usability rather than trading has enabled it to gain over 200,000 users, and this number is growing all the time. At the same time, there is a growing community of merchants accepting the coin too.

Dagcoin is a cryptocurrency that is ahead of the curve in this focus and why we believe it will become one of the major cryptocurrencies in the years to come.

Conclusion

Swings of +/- $1000 in the Bitcoin price over recent weeks have emphasized why both businesses and the majority of people around the world remain cautious and sceptical about crypto. People and businesses do not want to risk potentially losing huge amounts of money overnight.

This is why if cryptocurrencies are going to be used by the mainstream, not only do prices need to be more stable, but people need to be able to spend them everywhere. This is why Dagcoin’s focus is on creating a currency with an infrastructure business need in order to start accepting and making payments using the currency. We believe that over the next 4-5 years other cryptocurrencies will do the same.

The more people can do with crypto, the more people will start using it. And, the more users a currency has, the more merchants will want to start accepting it as a payment method. And, so it grows …