Can crypto go negative?
Cryptocurrencies are a form of digital currencies that are used for exchange or trading. It was introduced to work as a substitute for other fiat currencies (fiat currencies are currencies like dollar, euro, etc.). These digital currencies are not in control of any government, state, major banks or any kind of authority. Cryptocurrencies use blockchain technology, and therefore the records of every transaction get catalogued in the blocks.
There are already more than 9000 types of crypto coins available in the market, and among the most valued cryptocurrencies are Bitcoin, Ethereum, Litecoin, Binance, Tether, etc. Bitcoin is leading the market with its price. The Crypto market is very wild in nature; therefore, investing can be risky for those who are new to cryptocurrency.
Nevertheless, you can become concerned and start wondering if the value of crypto coins can become negative? Well, the answer to this question is a straight ‘No’; digital currencies’ value cannot be negative, and the lowest it can fall is zero but not negative. Because when you buy or exchange crypto coins, you are getting those coins against the money you are utilizing. Also, you can get these virtual coins through mining or receive after buying some products or services.
The value of crypto coins cannot fall less than zero; if it does, then it means you would have to pay the amount to someone else to take those coins from you. Any property or asset’s value can ever be negative.
How it works
Cryptocurrencies are based on peer to peer (p2p) technology. The cryptocoin transactions get recorded on nodes using various algorithms. Every node possesses transaction records with the address attached. When the transaction gets validated, the file reads “(blank) gave Y amount to (blank)” then, after the completion of the transaction, the nodes get signed with a specific algorithm attached. Lastly, the final node gets attached with the previous records to create a new block. The output is also checked before sending out the coins.
The code in the block disallows or rejects any transactions that have been made more than their limit. It itself will automatically recheck and conclude the transaction as invalid if anything similar happens. Each time an output is spent, it gets a new value, and the system identifies the code with the new value intact.
If you are worried and think that your investment will become negative if you invest or trade using crypto coins, then you have the wrong perception. You can invest in crypto coins with assurance, and don’t worry; your money won’t become negative.