When thinking about cryptocurrency investing, many will immediately associate it within the same breath of gambling. Naturally, many will link the two activities due to the amount of risk that can be associated with the two different activities, however when breaking each of them down, it is extremely clear that investing and gambling are two completely different things.
First things first, gambling can be defined as being an activity in which games are played in order to try and obtain a profit. Indeed, gamblers are now able to use digital tokens including Bitcoin to enjoy cryptocurrency slots and table games where they are able to receive a number of different benefits including improved and enhanced security, as well as faster and cheaper transactions.
Those that look at cryptocurrency as an investment will not be playing games per se, though, as they will be looking to try and obtain a level of profit by buying a token at a level that they believe will be favorable compared to the price that they hope to acquire when the time comes to sell.
Naturally, there are a range of major differences that can help to separate the two activities from each other, with each of them having been outlined in detail below in this article.
Risk is different for both
There is no denying that both gambling and investment activities involve a huge amount of risk and both require plenty of self-discipline when they are being conducted, however the type of risk is completely different for both.
In regard to gambling with cryptocurrency, punters will be looking to potentially turn a profit via the use of a game. However, there is no guarantee that this can happen, as each game’s outcome is incredibly random, thus making the level of risk unpredictable. This is very different to the risk that is experienced by investors.
Those who invest in crypto will have been able to try and apply data and knowledge that can help them to try and make a prediction and forecast what may happen in the future if an investment is to be made. Naturally, this will help to potentially reduce the level of risk experienced, however it is impossible to see it be completely eliminated.
It could be argued that the only similarity that the two activities share in regard to risk is that those who decide to participate have control over what they decide to do and how much they decide to use.
Specific goals vs one main aim
There is no doubt that many get involved in investing and gambling in order to try and earn as much money as possible, however there is a rather big difference between the ultimate goal of the activity that is being enjoyed.
Those who invest in crypto will actually have a number of very specific aims that they wish to achieve when they make an investment, including factors like the rate of return, the amount of time that it could potentially take in order to receive the desired amount as well as the amount of risk that could be experienced. Furthermore, an investment is typically viewed as a long-term thing and something that could be utilized a little later in life.
For gamblers, there is only one real main aim when it comes down to using crypto and that is simply to make more in a short period of time whilst also enjoying one of their many passions. Players will typically look to make short-term financial gains through wagering, as well, rather than looking too far in the future.
To conclude, it is clear that whilst there is risk attached to both activities, there are a number of differences between those who invest in crypto and those who decide to play their favorite games and wager with crypto.
Disclaimer: This content does not necessarily represent the views of IWB.