How does diminishing marginal utility explain the value of cryptocurrencies?

1 answers

• Dec 26, 2021 · 3 years ago
  Ah, the value of cryptocurrencies and diminishing marginal utility. Diminishing marginal utility is a fancy way of saying that the more of something you have, the less satisfaction you get from each additional unit. This concept can be applied to cryptocurrencies to understand why they are valuable. Initially, cryptocurrencies had little practical use and were not widely adopted. However, as more people started using them and recognizing their benefits, their value began to rise. This is because the more people that use cryptocurrencies, the more utility they provide, and the higher their value becomes. So, the diminishing marginal utility of cryptocurrencies helps explain why they have value.
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