By using Blockchain technology, cryptocurrencies find their way into many industries as secure payment options across many online platforms, including casinos.
Across the spectrum of online businesses, casinos are the most frequent converts to cryptocurrencies (also known as crypto). The future of crypto and casinos is secure with increasing gamblers participating online or on their mobile devices.
Read on to find out the more in-depth questions asked and whether there’s a future for cryptocurrency in the gambling world.
Cryptocurrency: Simply Put
You can’t pick up and hold a Bitcoin in your hand or pull a note out of your wallet. This lack of physicality does not mean there is no worth to a cryptocurrency. In simple terms, cryptocurrencies are electronic peer-to-peer (i.e. shared access to files without a central server) currencies. These decentralized files are stored in Blockchains.
A basic understanding of the Blockchain technology driving this new currency is required to establish a clearer idea of its impact and future.
What is Blockchain Technology?
Once a transaction file is Blockchain stored, it is impossible to alter, hack or delete it. A Blockchain is a digital ledger of these transactions that is distributed to the network of users. As more and more people invest in cryptocurrencies, so too are the number of Blockchains growing. This increase in investor numbers adds significantly to the security of the data.
No one person controls a Blockchain – it is transparent to all investors. Currency cannot be faked, hacked or duplicated. People who own this currency can trust it’s worth. An added benefit to cryptocurrency is its anonymity and independence from banks and governments. So, where does this benefit the gambling industry?
Benefits of Crypto in the Gambling Industry
The benefits of using crypto are varied and numerous, but here are a few key reasons to trust the currency:
- Anonymity – users of cryptocurrency do not have to divulge their details
- Data security – transactions are protected, eliminating the potential risk of personal data theft by website hackers
- Personal safety – digital transactions as opposed to physical cash ensure winnings are secure
- No intermediary involvement – e.g. banks
- No fees – casinos have reduced handling fees and bank charges
- Market stability – cryptocurrencies (e.g. Bitcoins) are often more stable than traditional currencies and are predicted to increase steadily
Disadvantages of Crypto in the Gambling Industry
However, along with the benefits outlined above, there are some drawbacks to using cryptocurrencies in the gambling industry, such as:
- Non-acceptance as a payment option – currently, there is no industry-wide acceptance of this form of payment by casinos. This is viewed negatively by players
- Centralized network risk – a potential data security risk exists where casinos host cryptocurrencies
- The perceived ‘dark side’ – cryptocurrency trading built up its popularity through the dark web with possible links to arms deals and international crime organizations
Regulations: Will They Get in the Way?
Casinos are currently legally obliged to ask players to prove they can support their bets. As and when these establishments accept cryptocurrencies, the player will be anonymous.
The value of cryptocurrencies fluctuates, increasing and decreasing all of the time. Fluctuation creates instability for both the gambler and the casino. Many regard an investment in a cryptocurrency to be a form of gambling in itself.
The difference between a game like roulette and investment in Bitcoins, for example, is the odds in a roulette game require understanding for success. A similar approach to investing in a cryptocurrency is worthless due to cryptos’ volatility.
Regulators have recognized cryptocurrencies as a legal tender in the gambling industry, but with the proviso that tight controls are in place to manage the risks involved.
Transformation
Many of the shortcomings already mentioned are addressed by Blockchain technology. Decentralization of the files ensures that no one person controls or can tamper with the data.
Verification by Blockchain ‘miners’ guarantees the legitimacy of transactions, ensuring a level playing field. The result is Blockchain protection and the elimination of data manipulation and online fraud.
The transparency provided to users of the network implies that all transactions are verifiable. With this technology being part of the future, it can’t be ignored by the gambling industry. Experts predict an industry-wide transformation in the next 10 years, so forward-thinking casinos should embrace the challenge or get left behind.
In a quest for improved fairness and transparency of online gambling, Blockchain technology guarantees positive results.
Despite regulatory efforts, specific locations have made progress in adopting laws allowing gambling establishments to trade with cryptocurrencies. Overcoming these challenges will ensure Blockchain technology is in place to protect all involved in the gambling industry. It can, therefore, be said that the future of crypto is now.