What is Cryptocurrency?

What is Cryptocurrency?

What is Cryptocurrency?

Schedule

  • The Benefits of Cryptocurrency
  • How Does Cryptocurrency Work?
  • The Drawbacks of Using Cryptocurrency
  • Why are Cryptocurrencies Popular?
  • Investing in Cryptocurrency
  • Cryptocurrency vs Fiat Currency: Which is Better for Gambling?
  • Transaction costs
  • Anonymity
  • Conclusion

Unlike ordinary currencies like the Dollar, Euro, Yen, and Pound, cryptocurrencies don’t exist physically. Yet, they can be used for online transactions just like regular money.

The Benefits of Cryptocurrency

Crypto transactions are instant. Unlike traditional (fiat) currencies, they do not need verification from banks and governments, which usually takes up a lot of time.
Crypto transactions are secure. They are recorded via blockchain, which secures the data from unauthorised access.
Cryptocurrencies are safe from inflation. With more and more people using cryptocurrency, their exchange rate is only rising.
Cryptographic transactions are anonymous, making them an excellent tool for whistleblowers, journalists, activists and oppressed groups.

How Does Cryptocurrency Work?

Crypto transactions are instantaneous and do not require third-party payment services like banks or financial institutions. These transactions are secured using public and private keys along with several incentive systems like Proof of Stake and Proof of Work. You can learn more by following the links. But for the sake of clarity, we’ll walk you through the basics.
Proof of Stake or PoS states that a person’s mining capabilities improve with the number of coins at their disposal. Therefore, a miner with a higher number of coins will have more mining power.
Proof of Work or PoW is a form of zero-knowledge proof where one party proves to another that a specific amount of computational effort has been used. This prevents the misuse of computational power for launching malicious attacks like spam mail or DDoS attacks.
Crypto wallets store the public key, which must corroborate with the private key that the account holder enters while processing a transaction. Crypto transactions are completed instantaneously and at a minimum expense, unlike banks and other financial institutions.

The Drawbacks of Using Cryptocurrency

While cryptocurrency is getting more and more popular each year, it is mainly used for online transactions. Unfortunately, there are seldom any grocery stores, restaurants and other brick-and-mortar businesses that accept cryptocurrencies for their products or services at the time being.
Another drawback is the volatility of their exchange rate. With crypto value still increasing, many people are using them as an investment, not a currency for daily purchases. While lucrative, this is one of the factors that hamper the widespread adoption of cryptocurrencies in lieu of fiat.

Why are Cryptocurrencies Popular?

As evident, cryptocurrencies are unique in several ways, and these quirks make them popular with the younger crowd. Let’s take a look at some of the main reasons behind the increasing popularity of crypto tokens.
Safe from inflation: Crypto enthusiasts are increasingly diverging funds from traditional banks to crypto wallets. They believe the conventional banking system tends to devalue currency over time using inflation.
Rising exchange rates: With cryptocurrencies getting more valuable, many are trying to get on the crypto train by investing in Bitcoin, Ethereum, Litecoin and many others.
Truly international: The decentralised nature of crypto transactions makes them perfect for international transactions. The iGaming industry has capitalised on this opportunity, which has led to new players opting for crypto casinos.
Mineable: While not as popular or lucrative as before, it is still possible to mine cryptocurrencies by using your own computer to solve complex mathematical problems. Some even are building dedicated rigs to mine crypto!

Investing in Cryptocurrency

While cryptocurrency prices might continue to soar in the future, most investors view this as a high volatility option. They would rather bet on traditional businesses than the crypto market. The reason behind this lies in the high rates. However, where the risks are high, the rewards are high accordingly.
Even though it might seem like a speculative buy, there are several advantages to investing in cryptocurrency. The potential for higher returns, protection against payment fraud, immediate settlement, and greater liquidity are some of the perks of crypto trading.

Cryptocurrency vs Fiat Currency: Which is Better for Gambling?

The inherent nature of cryptocurrencies gives them the edge when compared to fiat currencies for online gambling. Let’s walk you through some of the common benefits of using blockchain tokens for iGaming.
Transaction speed
Fiat currencies need third-party payment gateways for processing transactions. The verification process consumes a lot of time since it’s under government scrutiny. And while deposits to the casino account are almost instantaneous, withdrawal requests can take anywhere between 24 and 72 hours to process. Cryptocurrency transactions, however, are instant.

Transaction costs

Unlike fiat currencies, crypto transactions don’t incur high convenience fees or storage charges. The miners earn a small commission for every transaction, and this amount is negligible compared to what established financial institutions charge per transaction. Crypto casinos save a considerable amount that traditional casinos have to bear, and this benefit is passed down to the players, making crypto casinos cheaper than conventional online casinos.

Anonymity

The anonymous nature of crypto transactions is a boon as they can’t be traced back to the punters. And since most governments don’t formally recognise cryptocurrencies, any amount earned from gambling is tax-free. Apart from added privacy, cryptographic transactions offer higher security as they can’t be recreated or tampered with once the details enter the blockchain.

Conclusion

Cryptocurrencies have a long list of pros and cons. It’s up to you to decide how, why, and when to use crypto tokens over regular money. If you intend to use cryptocurrency for transactions or investments, several reliable crypto exchanges help you get started.

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