The 'Multidimensional' Nature Of Crypto

Cryptocurrency has different parts, which are all worth looking at to understand the value of a token. It is a form of money, but it can also be much more than that. Two key features to it are that it is a 'digital asset' and an 'open-source protocol'.

Protocol-based asset means that it exists independently from any one company or organization and is governed by an open source code. This gives users like you and me the power to build new applications on top of existing protocols, building up layers that are dependent on each other but also independent from one another.

I think these two components make up the heart of cryptocurrency and are what gives it its unique value and understanding them can help you think about its potential beyond fiat value.

You may have thought of cryptocurrency as a store of value, or even as a payment method. But you may not have considered its potential beyond those two uses.

Crypto Can Be More Than Just A Store Of Value

As a decentralized internet [technology]( https://leofinance.io/@leoglossary/leoglossary-technology), blockchain can be used for much more than just building cryptocurrencies. The use cases of [blockchain]( https://leofinance.io/@leoglossary/leoglossary-blockchain) are growing daily and new ideas are being developed every minute.

For example, Bitcoin can be used as a store of value or as an alternative to fiat currencies like USD, EURO, etc., but it can also be used for voting purposes or identity verification. Since blockchains are secure by design, this makes them attractive options for authentication purposes of all kinds because they do not require usernames or passwords that could easily be stolen by hackers.

Price Isn't Everything

Cryptocurrency is more than a decade old now but it's evolution hasn't moved much beyond the 'price focused lens'. It's like when you first discover a tree but marvel only at its ripest fruit never lifting your gaze beyond it.

When you're thinking about investing in cryptocurrency (or even 'utilizing' it), remember that price isn't everything. Just as you wouldn't buy a stock based solely on its price, don't invest in cryptocurrencies based solely on its price.

In fact, it's best not to make any investment decisions based solely on anything but the underlying asset itself; what goes up can come down and what goes down can go up again (as long as there is still demand for that asset).

Price moves are sometimes driven by emotion more than fundamentals and therefore will not always reflect the true value of an asset. Price is one part of the equation when determining whether or not an investment makes sense; other factors include growth potential, risk tolerance and liquidity among others.

It Doesn't Have To Be Considered Only Through One Lens

Cryptocurrency is a broad term that encompasses many different types of coins and [tokens](https://leofinance.io/@leoglossary/leoglossary-token). In the same way that you can't say wine is just one thing, or cars are only for transportation (future), cryptocurrency isn't one-dimensional.

There are coins, like Bitcoin, which act as stores of value; there are tokens that act as utility tokens (like Hive) and there are even security tokens. Each coin or token has its own individual purpose in the ecosystem—but the bottom line is that it's not just one thing.

Cryptocurrency is a 'complex' system with multiple elements. If you look at the value of a cryptocurrency from only one angle, you could be missing out on a lot of information and opportunities. There are many other things about cryptocurrencies that are just as important but less obvious than their price:

Their stability and safety (e.g., whether they have been hacked in the past)
Their security features (e.g., how well they protect against fraud)
The speed at which they are able to process transactions.

Conclusion

The value of cryptocurrency is more than just its price. It’s a protocol-based asset with potential to be used in ways that go far beyond traditional fiat currency. Understanding these different dimensions of crypto, can help you make a more informed decision about whether or not it’s right for your [portfolio](https://leofinance.io/@leoglossary/leoglossary-portfolio).

Thanks For Reading!

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