People are often referring to the cryptocurrency market being a bubble, but what does this actually mean? Some liken cryptocurrencies to playing on-line games, with the only difference being that cryptocurrencies are tradable.
When you play games like Candy Crush, you are doing so to win coins, tokens or jewels, in order to reach the next level of the game. When you get the right number of coins, or tokens, you can then move up a level, proceeding in the game. In some online games, you can use these coins to purchase new levels, or accessories that will help you to complete that level, allowing you to proceed. Most will also have the function to purchase a large number of additional coins in exchange for fiat money.
Experts argue that winning these tokens on online games is actually incredibly similar to the mining of cryptocurrencies. Although it is safe to say that you need considerably more computing power to mine these cryptocurrencies, there is a huge similarity.
One big difference at the moment is the regulations. Online games have rules, and are regulated. You need something in order to proceed to the next part of the game. You cannot cheat your way through, or use fraudulent coins in order to reach the next level. Unfortunately though, this is something that the cryptocurrency market lacks, and many experts argue would benefit from. Having spectators and regulations will ensure that investors have proper counterparty protection, and will help to eliminate fraudulent actions. There are a huge number of cryptocurrencies in the market now, and this number is just set to grow and grow, and yet, it seems completely reasonable to assume that all of these are not of the same quality, and this can be due to the lack of regulations.
Is it fair to compare the two? Let’s be honest, cryptocurrencies have a very complicated code and puzzles associated with it, and requires more skill to enter the market, but the reality is that when you strip it right back, there might be more similarities than you first thought.
Playing an online game like Candy Crush and getting rewarded in coins for solving a puzzle is considered to be fun. However; when you take these coins that you have won from completing your online puzzle and trade them with others, you have essentially just described the trading of cryptocurrencies. The cryptocurrency market might be harder to win and to make a profit in, but the basic qualities are similar.
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