We all know what a massive impact digital technology has had on our lives since the internet was first fired up. Since then, we have seen enormous growth in not only internet usage but also the digital tech that supports it. Online gambling in NJ is now something residents there can enjoy if they don’t want to visit a physical casino while others around the globe shop, bank, and chat with friends online. Of course, digital money has also seen a rapid rise in recent years. All this is thanks to the underlying tech that makes it possible.
Digital money is no longer solely limited to the cryptocurrency world. New generations of video games have started to use their own virtual currencies in-game for players to enjoy. For some, though, this is a little confusing as the lines between crypto and virtual video game cash blurs. Just how do these two forms of currency differ and what similarities do they share?
One area where there is a distinct similarity between the two is their general description. In simple terms, both can be classified as a digital currency. That is a blanket definition that can be used to cover all types of electronic money, whether real or only seen in video games. As we will see below, there are differences when you begin to dig down further into their specific set-ups, but they are both digital currencies at heart.
Both use the concept of individual coins
Another similarity between the virtual game currency and crypto is the concept of individual coins. These might be called tokens or chips in video games, but they are essentially the same thing.
Breaking the currency used down into smaller pieces makes them more usable (as with fiat currencies), and easier to spend. When the Diamond Casino and Resort in GTA Online opened in 2019, it allowed players to use individual chips at the tables in-game. This is a similar idea to how cryptocurrency makes use of individual coins for people to buy or sell.
How you can use them
As we will look at further below, what you can use cryptocurrency and video game currency for is wildly different, but how you use the two is not. As both are digital currencies, they only exist in an electronic form and are intangible. That means that you can only spend them online or use them in a digital way.
While some cryptocurrencies can be used in real-world shops, this central idea is the same. You cannot, for example, withdraw paper crypto from an ATM to pay for goods – you still need to make the transaction digitally. This online method of use is the same for both – whether you spend your video game tokens online in a game or your crypto to buy goods.
But what differences are there between the two?
While there are some similarities between these two currencies, there are also some key differences. The first is in their specific definition. While both are classed as a digital currency, their specific make-up and design are far apart. Virtual video game currency is created by a central source (i.e., the game studio) and is there to be used solely within a particular game.
Cryptocurrency, however, is mined in a decentralized way around the planet, with no one company being in control. Even the process of mining is different for crypto as the relevant game studio simply creates its video game currency. Cryptocurrency is also based on highly secure blockchain tech, which video game cash is not.
What other differences are there?
When it comes to video game cash and cryptocurrency, the other significant difference is what they can be used for. Video game tokens can only be used in that specific game and are usually there to help buy in-game upgrades or unlock new content. They have no value in the real world.
Cryptocurrencies, on the other hand, do have a value in the real world, the same as fiat currency. That means that you can use crypto coins to buy goods or services in the real world – but not to unlock content in a video game. Cryptocurrency can also be invested in and traded to make money via coin exchanges. That is not true for video game currency, which cannot be traded to make money.
Virtual video game currency and crypto explained
Hopefully, the above has given an insight into how these two share some similarities but are also quite different in a few ways. While both can rightfully be called digital currency, there are enough differences to make them separate things. With more games set to include their own virtual cash and crypto still gaining in popularity, it is worth knowing the differences.