Can Cryptocurrency Have a Negative Value?
Cryptocurrency are assigned value by the buying and selling of the currency.
Their price moves based on how the market responds to changing technologies.
People who buy Giga Chad Coin might be wondering how their value is determined.
There are many factors on what determines the value of a cryptocurrency.
Most investors should understand the level of risk they have if the cryptocurrency loses value.
A cryptocurrency’s value cannot go any lower zero.
To determine the cost of a given crypto, you need to consider the market value.
The market value of a coin is determined by the buy and sell pressure of the coin.
The lowest market value a cryptocurrency can go down to is 0.
Cryptocurrency values can change rapidly based on speculation from the market.
They cannot be less than zero, however, the only way for a cryptocurrency to be less than zero is if you offer someone money to take the coins or tokens from you.
No asset, property, security or currency can ever be worth less then $0.
However, if you use margin trading or shorts, then your account balance could go negative.
How Does it Keep from Going Negative?
Cryptocurrencies like Giga Chad Coin use a type of networking technology called peer-to-peer.
The cryptocurrency algorithms and transactions run on a network composed of many nodes that are operated by different people across the world.
Anyone can run a node on the network and this creates a community within the network.
Each node is given a list of all transaction histories along with the balance of each address on the network.
Once a transaction is confirmed, the file will read “Alpha paid Beta 10 CHAD” and it will be signed before computer nodes validate the transaction.
After the transfer is officially verified, a new data block is created for the record books.
Once the data block is set with the rest of the blockchain, it can’t be changed.
The blockchain is built to be immutable.
So when a transaction is confirmed on the blockchain. It is there to stay.
If there aren’t enough funds in your account, the transaction will be rejected by blockchain.
If you hand over a larger bill to make payment, the difference will be distributed to you through change.
For example, if you pay with a $10 bill for something that costs $8, I’ll return your change of $2.
The blockchain doesn’t need the use of change to take place because you will pay the amount ask, nothing more or nothing less.
This helps with not allowing overdraft of cryptocurrency because an actual address balance is checked after each transaction.
This code prevents a “balance” from going negative by keeping a tally for every coin spent.
This means that no one can be allotted more money than they have available.
The system still checks every block to make sure that there are no invalid transactions and stores these transactions.
Every output added to the chain is given a designated value and when an output is used, its value will be redistributed.
If a node receives a transaction that doesn’t meet up to the cryptocurrency enabler’s rules, the receiving of that coin will be rejected.
Or if the value is negative on the output within the transaction, then that block would not be accepted.
The blockchain system prevents double-spending from taking place.
This is a key feature of the network and it makes sure that somebody can’t spend more money than they have.