
Ask HN: How do digital currencies differ from card points? - codazoda
I know that card points are not crypto currencies but they do seem like a type of digital currency. Points, however, don&#x27;t tend to fluctuate with a type of market. Could they? What prevents them from doing so?
======
jotjotzzz
Card points is based on a reward system that you virtually earn. Their value
is only relevant to the card and to the participant(s). It is not a currency.
Cryptocurrency is digital money built using blockchain technology. Both is
similar and that you can essentially convert them to buy things, but that is
where the similarities end. Card points is created by the Credit Card's
marketing department (most likely) after factoring in the cost-benefit to the
card for the company. Cryptocurrencies are created to circumvent the whole
banking system that used the Fed as the "points creator". The cyrptocurrencies
come into existence using value -- computing power to data mine. Card points
come into existence by someone waving a magic wand, just like the U.S.
currency. Honestly, if you are asking this question you probably don't know
the difference between currency vs. real money. Check out Mike Maloney on
Youtube's "Hidden Secrets of Money"
[https://www.youtube.com/watch?v=DyV0OfU3-FU](https://www.youtube.com/watch?v=DyV0OfU3-FU).

------
123e1daAdfafsdf
Points can fluctuate by dictate from the redemption group. If you follow the
points guy blog, you'll see they transfer "points" back into "dollars" by
looking at redemption rates. Sometimes, you redeem 1 point for $0.01 in goods;
some programs, the effective rate is $0.025. TPG's schtick is to help you
navigate that. I imagine those conversion values fluctuate.

Otherwise, I'd imagine one thing preventing this is the lack of
transferability in a lot of points programs. Plus, the limited acceptable
partners where you can spend them.

I'm sure there are more -- just wanted to start the discussion.

------
coryl
Are you asking in terms of economics or technicals?

Cryptocurrencies are distributed and basically impossible to take down or hack
through the front door (as an individual). They are less easily attributed to
a person or owner.

Virtual currencies are hosted and managed by some single entity, if they go
bankrupt so do your points. They tend to not have value outside of where you
can redeem them. Some businesses don't allow transferring of reward/loyalty
points, which makes it illiquid.

