Is crypto trading the same as gambling? Are they two sides of the same coin or are they unrelated? These questions would have pestered the minds of each crypto user who aimed to reach the skies using these decentralized digital assets. This article will examine the defining details of crypto trading and gambling and analyze the similarities and differences between them to help the users select either of them according to their needs. This article also denotes the interface between the two where the features of crypto trading overlap with that of crypto gambling.
What Is Crypto Trading?
Crypto trading is the act of trading cryptocurrencies in the market based on speculations that their price will move in such a way as to bring profit to the traders. The trading is done through dedicated cryptocurrency exchanges. Crypto trading is not controlled by any centralized agencies and is carried out by a network of computers that work based on specific algorithms. Trading and other transactions are finalized only after all the concerned nodes verify it and give their consent.
Like traditional financial markets, cryptocurrency trading is also done based on the tenets of demand and supply. Other major metrics that can be used to measure the profitability of crypto trading are the coin’s market capitalization and circulating supply. Other events regulatory updates, security breaches, and economic setbacks also affect the outcome of crypto trading.
What Is Crypto Gambling?
Gambling in the crypto space refers to online gambling using cryptocurrencies instead of fiat currencies. Players can wager on games like slots, poker, or sports betting through using cryptocurrency. As all the transactions are recorded using blockchain technology, it is impossible for anyone to tamper with the outcomes of gambling.
Crypto gambling offers privacy and security to the users. Even though personal information is collected by the gambling sites for KYC verification purposes, this data is not shared with anyone. The blockchain technology used in crypto gambling also ensures security for all the transactions. Moreover, crypto-gambling sites enable fast and cost-efficient transactions.
What Are The Similarities And Differences Between Crypto Trading And Gambling?
Crypto trading and gambling are interlinked as there are several similarities and differences between the two. Both trading and gambling are schemes orchestrated to make you grow rich fast. While this is the major benefit of crypto trading and gambling, this is a double-edged sword that also has the power to cause the players dear, as there are chances that they fall prey to the glamour of the industry.
Both crypto trading and gambling are prone to all-time highs and lows. There are chances that traders and gamblers become trapped by the high earnings that they get from this industry when they suddenly fall to all-time lows, losing most of their investments. This phenomenon is common for both crypto trading and gambling as the market volatility of cryptocurrencies causes this phenomenon.
The general uncertainty caused by volatile cryptocurrency prices and their unreliable nature is characteristic of both crypto trading and gambling. Traders and gamblers have to constantly face the pressures of changing the price of cryptocurrencies.
The differences between the two use cases of cryptocurrencies, trading, and gambling, are explained here. The victories and failures in crypto trading are not always a matter of chance. The outcomes can be manipulated to the trader’s favor if they rightly analyze the market and strategize their trading activities. However, this is not the case with gambling where the outcomes are purely based on chances and cannot be changed unless the system has been hacked and tampered with.
Moreover, different rules and regulations govern crypto trading and gambling. While trading is not at all controlled by any rules or regulations, many federal governments have devised rules and regulations to control online gambling. However, in case of a scam, you stand a chance to lose your investments in the case of both crypto trading and gambling.
The Bottom Line: Do Crypto Trading And Gambling Overlap?
When you compare crypto trading and gambling, you understand that both have similarities and differences. You should also note that there are certain points where trading and gambling overlap in terms of their features. Both are governed by speculative behavior on the part of the users and these experiences can be marred by price volatility. Both have the potential to give you high gains and huge losses. The perception of control over the outcomes is largely an illusion for most of the time.
To reduce the risks of trading and gambling and make the best use of the opportunities provided by them, make sure that you do adequate research and use comparatively stable cryptocurrencies. A thorough analysis of the market and research regarding the workings of these industries would help you make wise decisions.