The short answer – not anytime soon. Hope you enjoyed the article and have a nice day.
Of course, we’re joking! This article could get a bit technical so we’ll try to simplify it as much as possible.
Cryptocurrencies have been all the rage in the last couple of years. The digital currencies have shown substantial growth – some currencies grew up to 100,000,000% in their early years – which has motivated many people to start mining for coins. This in itself is a very complicated subject, so we won’t delve into it in this article – maybe another day.
Due to this growth, many people have started investing real money into cryptocurrencies. Many would argue that it’s always wise to invest in cryptocurrency but knowing when to buy and sell, given the market’s volatility, is the biggest challenge.
It didn’t take long for cryptocurrencies to find their way into all walks of life, including retail and online shopping, online casinos and gaming.
As it enters this arena, cryptocurrencies are competing against another popular form of payment gateway, called eWallet.
In this article we’ll compare the two forms of payment and see how they stack up – and answer the burning question – “will cryptocurrencies overtake ewallets?”.
Fundamental differences
We need to emphasize that cryptocurrency is digital and has no gold, silver, or any other material that backs its value – this gets determined by various factors which go beyond the scope of this article.
In traditional older currency systems gold, silver or other precious metals determined a coin or paper currency’s value and has evolved into the current system we use today – called fiat currency.
Fiat currency resembles the cryptocurrency model in that the value gets determined by the government, or the exchanging parties agree on its value. If I give you $1, we both agree that it’s “worth” $1.
Now, storing conventional currency is easy. It goes into a bank, which acts as a central storage point for money. You access the bank via the internet, or you get a statement from the teller to see how much money is in your account. You can send and receive money using the internet or other means of transacting, such as physically attending the bank to draw or deposit ‘hard’ currency.
Now eWallets aren’t bank accounts but are linked to bank accounts. Your bank account could have this functionality, where you can send money to an ewallet, and use the ewallet to do transactions. Some people prefer this method as the ewallet doesn’t require sensitive information, like bank account or credit card numbers, to be sent over the internet.
Additionally, eWallets are easy to use, accepted by many merchants and are safe and secure.
Cryptocurrencies are not as straightforward.
The storage of the coin is the issue. You get exchanges that act like banks, to keep coins secure. The problem with this is that you give control of your currency over to the operator of the exchange and they can trade with these as they deem fit.
Wallets for cryptocurrency are available but work differently than ewallets. For these you have a public key and a private key. The public key identifies your wallet, and the private key encrypts and decrypts information for transactions. If you lose your private key, or someone steals it from you, then all your coins can be lost forever.
There are paper forms of these, which add a greater risk of theft. You also get hot wallets, which are connected to the internet, and cold wallets, which are offline wallets with encryption codes loaded onto them, like a USB drive.
These cryptocurrencies aren’t as simplistic as conventional ways of banking. It’s complicated and time-consuming to learn and understand, although not impossible.
Conclusion
We’ll end in the same way we started – ewallets won’t be replaced by cryptocurrency in the near future, we think.
The complexity of crypto transactions, and the intricate and unsafe storage systems they offer, doesn’t make them a viable, user-friendly, sustainable trading platform.
That doesn’t mean that it won’t change in the future, of course, but for now ewallets will still be chosen above cryptocurrencies.
Wow, writing about this makes us feel like spending some money. Now if only I can remember where I put my crypto wallet key…