The world of Bitcoin and Cryptocurrency is fascinating for people inside the community and without. No matter your level of participation, the financial returns investors are demonstrating are truly remarkable, but the turbulence of this market scares many away. With coins growing more than 100% in value in a single day, only to collapse the next week, it can lead the casual observer to wonder if cryptocurrency speculation is just gambling.
There’s nothing wrong with gambling. The different casino games available at 188Bet are an example of games which combine chance and skill to help experienced players make money and have fun. Investment can also yield money and fun, but there are other key differences. Cryptocurrency investment tends to blur the line between these two different financial activities, but which one it is depends largely on the activity of the user.
Cryptocurrency as Speculation and Gambling
The cryptocurrency industry is largely unregulated. Unlike the traditional equities markets, cryptocurrency companies are not required to give any particular information to their investors. What’s more, so much money has been flooding into the space, that this has motivated countless individuals to create “scam” coins – usually tokens that have very little real world utility, but are instead meant to generate hype and grow in value before they are sold en masse by the people who started the hype. This is also known as a pump and dump scheme.
When a new cryptocurrency user jumps into the market and tries to get rich quick by investing in projects they know little about, this is basically gambling. It’s comparable to investing in penny stocks, which in the investment world is also regarded as gambling.
When Cryptocurrency is a Legitimate Investment
Not all of cryptocoins are scams, however. Many are great projects with excellent development teams, large supporter communities, real world applications, and working products. It can be difficult for a new user to shut out all of the noise in the marketplace, to find the real information that will show which companies are worth investing in. But when good companies are chosen, this can yield incredible investment returns, while risk is minimized because the of the knowledge of the investor.
There are also a number of coins which offer dividends, or make returns available that are similar in some ways to dividends but are not actually. Examples include NEO, a Chinese blockchain coin that gives holders free GAS (the transaction fee currency for the network) as long as they hold their NEO. GAS is currently around $20 each, so it’s cool to get some for free just for holding NEO. Similar deals are built into Rialto and ARK, and more coins are adopting these incentive strategies, even as they further develop their tech and grow in value.
As always, educated investment decisions give the investor a great deal of control. This control comes from knowledge and experience, which minimizes risk. Inexperienced investors who don’t understand that which they invest in are basically gambling. Highly speculative investing can yield good returns, but it’s always better to make informed decisions to minimize risk.
