How can a virtual currency have value?

Reasons, why cryptocurrency has become so popular, are:

  • People believe cryptocurrencies are the future. Therefore, they buy now, because they see it as likely that the projects will be more valuable in the future.

  • Most cryptocurrencies have a limit on how many units or tokens there are of that currency. It is therefore not possible to print money forever, as today's central banks do with fiat currencies.

  • Many people like the fact that cryptocurrencies weaken central banks as the governing medium of global money supply and monetary policy.  

  • You can use the currency for transactions, or to do automatic tasks via the blockchain (smart contracts)

  • It is decentralized, which allows you to perform transactions between users without the help of a central third party (such as a bank).

  • Decentralized storage of transactions and information can be more secure than regular centralized systems.

  • Many cryptocurrencies have a high transfer speed, and currencies can be easily be transferred between people in seconds/minutes from all over the world.

  • It is difficult to counterfeit the currency, this is due to advanced cryptography and blockchain technology.

  • There are also speculators who are fans of cryptocurrencies because they go up and down a lot in value, and thus are very volatile. This provides opportunities for large gains (and losses) over a short period of time.

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