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An encrypted credit card is a payment card that credits rewards in cryptocurrency. It can be a debit or credit card. It can facilitate crypto or fiat transactions, or both. The only rule of thumb is that it incentivizes you to pay with cryptocurrency. Without exception, these cryptocurrencies use a reward system and can be exchanged for Bitcoin, ETH, or their own original tokens (Tokens are similar in shape and size to currency, but have limited scope of use and have no currency effect. Coins usually need to be exchanged for money, used in shops, amusement parks, public transportation, etc., as vouchers to use services, exchange items, etc.). A survey conducted by CouponBirds shows that 46% of encrypted credit card holders plan to use their credit card for every purchase. Bitcoin, Ethereum, and Litecoin are the top three most popular cryptocurrencies. Moreover, 80% of people believe that Bitcoin will completely replace traditional credit cards.
So it becomes a question of whether encrypted credit cards that rely on cryptocurrencies are still attractive at present.
As a digital currency, Bitcoin itself is not a legal currency, and its circulation scene is secretive and niche. Since Satoshi Nakamoto used cryptography to give life to Bitcoin in 2009, the exponential growth of the current market value is astonishing. Many enterprises regard it as the general equivalent of transaction activities, and regard it as the same status as currency or other real objects. The rapid growth of Bitcoin’s market value has made many investors jealous and speculate in coins one after another.
Bitcoin uses peer-to-peer technology to function without a central authority or bank. It governs transactions and the issuance of bitcoins is done collectively by the network. Bitcoin is open to the public. No one owns or controls Bitcoin, and everyone can participate. Through its many unique properties, Bitcoin allows for exciting uses not covered by any previous payment system.
Since the US stock market circuit breaker in 2020, Bitcoin has soared from the lowest point of $4,000. As of February 2021, it has increased by more than 1,000%, and the highest price has reached $58,318. Many business leaders, investment and fund companies have supported it. In November of the same year, it reached an all-time high of $69,000.
However, there will be a turning point in June 2022. A total of 150,000 people in the field of encrypted digital assets suffered liquidation, and the liquidation amount was as high as $567 million. It is worth noting that Bitcoin once fell below $20,000, which means that in the past seven months, the price of Bitcoin has plummeted by about 70% from its all-time high of $69,000 in November 2021.
Ethereum is a product born around the blockchain. ETH is the native currency of Ethereum, it has multiple functions – it has value (it can be used to pay for transactions); it is a “bond”, which can generate profits; it can store value – these functions complement each other. It has developed rapidly since its appearance at the end of 2013. It is currently the second largest digital currency in the world after Bitcoin. Ethereum has its own memory block chain platform – Ethereum, which is different from Bitcoin’s memory block chain. Ethereum has a key technology called “smart contract”. It not only tracks transactions, but also uses program instructions to make itself trade. At the same time, Ethereum is the native cryptocurrency for all transactions on the Ethereum blockchain.
2021 can be described as a glorious year for Ethereum. It started to rise continuously from $730 at the beginning of the year, and broke through $1,000 in January, $2,000 in April, and $4,000 in early May. It reached $4735.07 on November 9, 2021 (the highest point since its inception). At present, its value has been floating around 1200 US dollars. The growth rate is also amazing.
In contrast, Litecoin will develop a little slower, and Litecoin is derived from Bitcoin. As Litecoin creator Charlie Lee said, Litecoin was not created to compete with Bitcoin, but to solve its existing problems and make digital currency transactions faster and more efficient.
In May 2017, the price of Litecoin began to rise sharply, from below $10, it soared all the way to a maximum of $375 that year, an increase of 8200%. After suffering a decline in 2019, its price has been basically between $40 and $100 so far.
Obviously, a lot of encrypted credit cards have emerged because of the fiery tokens, but as the market slowly cools down, it can be expected that encrypted credit cards will gradually become a bubble. Just like Block Fi, one of the initial platforms to provide encrypted credit card services, its Bitcoin rewards credit card is a representative of the cryptocurrency loan market, and it declared bankruptcy a few days ago. The fallout from cryptocurrency exchange platforms could have a knock-on effect.
Many experts predict that cryptocurrency companies will continue for some time to come, against the backdrop of a lack of investor confidence and a liquidity crisis spreading across many companies in the industry, leading to many bankruptcies. Perhaps, encrypted credit cards will come to an end as cryptocurrencies cool off.
Image Source: beincrypto.com
