Cryptocurrency – Ballast, And Volatility Explanation By DPCN

Cryptocurrencies

Ballast, And Volatility. Dapmcoin DPCN

A cryptocurrency has ballast, yes, ballast has several definitions. Everything that is ballasted adds value and weight, in other words (liquidity). Why is Dapmcoin ballasted? It is very simple to understand if the currency is not backed, it has no value and price. If it has a price, it has liquidity, then it is automatically backed by money or gold and minerals resource.

Ballast, And Volatility Explanation By DPCN

Does the concept of ballast suit a cryptocurrency like DPCN ? The reality is that all currencies are backed by gold or local currency, which symbolizes gold inside the currency. Because all currencies are backed by gold and silver.

Let's understand the representation of ballast in finance, it is good to think about its literal definition. Ballast was a weight that was placed in the hold of a ship to help balance it on the water, to provide stability.

In finance, this is what ballast seeks to bring: stability to a currency. It is a term used to describe mechanisms that, in general, generate some kind of implicit guarantee for an asset. It is a concept that ultimately determines the real value of coins in the sense that the backing is equivalent to the wealth of a country whose currency it purports to represent. But decentralized currencies represent global ballast or global wealth because decentralized assets are of unrestricted global use.

Over time, there has been a change in this concept. In the past, governments could only issue money if they increased the amount of gold in their reserves. Any centralized currency was backed by a gold reserve. Every dollar, every franc issued could be exchanged for an equivalent amount of gold. That was perfect ballast. In 1971, currencies lost this converting ability. What has come to dictate the value of a currency is its supply and demand in the market. That's why we see currencies varying so much against others.

There is a view that bitcoin has no ballast, and it really doesn't, but just like it, gold, diamonds and real estate, for example, don't either. The difference is that it is not a physical asset. Furthermore, bitcoin is a scarce commodity. The entity, which decides its future, has decided that there will be a limit of 21 million units of bitcoins available on the market. Same thing as in Dapmcoin currency with a limit of 5,191,898 million.

The perception of scarcity and the supply and demand relationship, where the more companies accept Bitcoin, the more people understand and look for the asset, make the price tend to rise, since its quantity is scarce.

The fact that it has no ballast does not mean that it is a problem, that it does not deserve attention or that it should not be taken seriously. That's not it. This is a characteristic of bitcoin, as other assets also have this characteristic.

Which explains the volatility of assets.

How is the volatility of Dapmcoin DPCN explained?

The variation of the DPCN, like any other asset, is a function of its supply x demand. This even happens with stablecoins such as USD Coin, a cryptocurrency backed by the US dollar. The crypto market capitalization is estimated at $1.7 trillion, half of which is in bitcoin.