A wide range of cryptocurrencies, including bitcoin, is gradually being embraced by more and more people across the globe. They are creeping into just about every single aspect of our daily lives, including such things as the Xbox, travel websites like Expedia, and even KFC Canada, which has started accepting cryptocurrency payments.
There is one industry, though, where cryptocurrencies are yet to make their full potential clearly felt, and that is the online gambling industry. This industry has always focused on innovations. It would, therefore, be a huge mistake for online betting operators not to even consider incorporating cryptocurrency into their payment forms. More and more people prefer dealing in cryptocurrency, and there are many who are looking to convert their cryptocurrencies into cash by way of profiting on a gambling website.
A Match Made in Heaven
Any way you look at it, it certainly appears that cryptocurrencies and online casinos are a perfect match. Online casinos have steadily grown in popularity, particularly in recent years through mobile and tablet platforms. In the same way, cryptocurrencies have seen a surge in popularity, but in a more general market.
The reason why cryptocurrency started gaining popularity in online casinos was not only because of its mainstream popularity but also because it offers some special benefits that traditional funding options at online casinos cannot really compete with. To begin with, it has offered a unique selling point for a number of online gambling operators, which came to be known as sites “that accept bitcoin for gambling.” One of these online casinos is CashBet, who just signed a sponsorship deal with Arsenal FC earlier this year.
At present, the discussion as to whether cryptocurrency should be recognised as a currency is still quite prevalent. There are still a number of countries that do not recognise them as valid forms of currency. This means that for many people, betting with cryptocurrency means that they are not betting with real money, but ultimately gaining real money in the event that they win.
This actually works in favour of online casinos that only allow betting with cryptocurrencies, because if they’re not considered real currency, then gambling legislation technically does not apply to them. Providing a way for players to gamble in areas where real money betting is forbidden by offering secure and transparent transfers is, therefore, the main factor that directed the positioning of cryptocurrencies in the online gambling industry. And if the value of cryptocurrencies experience a significant increase the way it did in the fourth quarter of 2017, casinos that offer the option could make an enormous return.
The Digital Age
Standard currencies are obviously not going anywhere, but there’s practically no room for paper money and coin commodities in the digital age. Of course, this isn’t to say that online gambling sites that offer no other option besides stand currencies are not without their share of challenges.
The truth is that debit cards, credit cards, and bank transfers were never meant to be used the way they’re being used these days. Slow, costly, and usually not that effective--these are the characteristics that make it obvious how old-fashioned cash currencies could weigh down an online casino.
Digital currencies such as bitcoin, on the other hand, are products of the digital age, which makes them perfect for the online casino industry. They are therefore the best solution for online gambling platforms. Cryptocurrencies have truly taken online gaming to a new level, and they are used by operators and players alike to avoid a variety of barriers and take advantage of legislation loopholes.
The Impact of Cryptocurrency
Despite the presence of a number of barriers that online casino platforms have to face with regard to the adoption of cryptocurrencies, the developments in this area over the past few years definitely show a lot of promise. The online gambling sector is finally beginning to understand and acknowledge the benefits offered by this new technology. Here we will look at some of the ways bitcoin and other popular cryptocurrencies are disrupting the online gambling industry but in a good way.
Many people are still wondering if the technology behind cryptocurrencies does indeed offer some advantages to the online gambling industry. Despite this, however, it has become a commonly known fact that the biggest advantage offered by cryptocurrency in this industry has to do with data security.
Online gambling platforms, by their very nature, hold extensive player data on their servers. This includes information related to players’ debit cards, credit cards, banking details, and other personal data. All these pieces of information make players vulnerable to hacking attempts as well as potential internal frauds.
When cryptocurrencies are used, online casinos will only need to save the public key of every customer. Hackers won’t have any way of stealing the information, even if the casino operator chooses to maintain records of every single transaction. And all a player needs to do is to ensure the safety and security of his or her respective cryptocurrency wallet.
2. Quick Withdrawals
An online gambling platform usually takes somewhere around 72 hours to transfer winnings to a player’s account. The reason for this is that casino operators are required to go through conventional banking channels to secure authorisation for every transaction, and these processes typically consume a lot of time.
If you can imagine winning a huge progressive jackpot and then having to wait seemingly forever to actually get your cash, then you’ll get an idea of how attractive cryptocurrencies can be to players. Cryptocurrency withdrawals are processed almost instantly because everything is done online. As an added bonus, cryptocurrency withdrawals typically do not involve any bank charges. Progressive jackpot slots are extremely popular among at big-time online casino platforms, which makes it even more logical for operators to start offering cryptocurrency as a payment option.
3. Unrestricted Play
One of the biggest barriers for online gamblers, particularly those who live in conservative countries, is super strict gambling regulations. Cryptocurrencies can seem like manna from heaven for these players since they allow said players to gamble to their heart’s content without their identities being revealed.
It has always been possible for players to mask their identities and location when they gamble online; this is typically done with the help of a VPN. But these players still needed to go through conventional banking systems when they deposited and withdrew funds, thereby making the whole masking process completely pointless. With the use of cryptocurrencies, these players can play from wherever they want, with how much money they want, and however they want, and they don’t have to worry about regulatory agencies calling them out or penalising them.
The Role of Blockchain
In discussions about cryptocurrency, it is normal to hear the term “blockchain” mentioned repeatedly. Some people even use these two terms interchangeably. The truth is that blockchain is indeed associated with cryptocurrency, but the two terms do not mean the same thing. Blockchain is a ground-breaking technology that serves as a platform for tokens, among other things.
Blockchain is the technology that allows for the safe recording and transferring of data without the need for middlemen. It is known to be tamper-proof, transparent, and irreversible. For this reason, the technology can be applied to almost all aspects of our lives, from sectors like finance to the entertainment industry, which includes gambling.
The gambling industry is, in fact, the kind of industry where finance and entertainment collide. This may be why blockchain has proven particularly disruptive in this industry. There are obvious threats to players in online casinos, such as fraud, payment data vulnerability, and identity disclosure. Blockchain could very well be the most viable solution that can make online gambling fairer, more secure, and a lot more convenient.
The Problem with Online Casinos
Before taking a closer look at blockchain solutions for online casinos, it may be a good idea to first consider the issues the industry is currently facing.
- Lack of reliability - Online gambling is a multi-billion dollar business. No one can be a hundred percent sure that every single gambling website out there follows “fair play” rules, especially where house edges are concerned.
- Strict regulation - Many countries across the globe keep a tight grip on the gambling industry by way of strict regulation. In many cases, gambling activities are even completely banned.
- Complex transaction procedure - Depositing and withdrawing of funds in relation to gambling typically requires verification, which may take up to several days. Some banks might even reject payments related to online gambling.
- Fraudulent activity - Online casinos could be vulnerable to financial fraud initiated by visitors. In fraud cases, the casino would have to bear the losses.
The most obvious advantage offered by blockchain technology is that it introduces cryptocurrencies as a payment option for online casinos. Cryptocurrency not only allows players to maintain anonymity but also offers the benefits of instant financial transactions. Casinos also benefit by gaining access to more efficient deals with lower fees and the absence of cash tracking. Other than that, blockchain offers the following advantages to both parties:
- Transparency - Blockchain technology records all transactions and makes sure they are immutable. This assures players of fairness in online casinos. At the same time, it assures casino operators that players cannot cheat their way to huge winnings.
- No third parties - Blockchain eliminates the need for middlemen such as banks and other financial institutions for the transaction process. It allows users and websites to interact in a peer-to-peer mode.
- Enhanced security - Blockchain does not store personal data about the transaction parties. Additionally, the most innovative blockchain services allow the use of smart contracts with predefined terms and conditions that cannot be changed after it has been signed. This leaves no room for manipulation and fraud.
- Accessibility - Blockchain systems are typically decentralised, allowing more gamblers to join the game. In theory, users can play even if they are located in a country where online casinos are totally banned.
More and more online casinos are gradually switching to blockchain gambling and supporting cryptocurrencies as an acceptable payment method. Here are some of the most interesting applications for blockchain technology:
- Betting websites - Blockchain technology helps betting websites gather worldwide data on sports and media events. And with the use of smart contracts, bookmakers can provide self-executing bets. Furthermore, players will be able to back their own predictions with various conditions and incorporate them into smart contracts.
- Poker Rooms - There is traditional video poker, and then there are poker rooms that are powered by blockchain technology and smart contracts. These poker rooms allow players to join any game from anywhere in the world. They also allow cryptocurrency deposits and withdrawals to encourage faster and smoother financial transactions. Furthermore, there are decentralised poker rooms that remove intermediaries, thereby ensuring the game’s fairness and safety.
- Lotteries - The lottery is perhaps the least fair form of gambling there is in the world. Lotteries are tricky because no bettor could ever really discover the real results. Blockchain lotteries, however, are fully transparent because it allows everybody to check the rules.
Besides the three applications mentioned above, there is an innovation called “zero-edge casino”. The general concept is to create a decentralised system that does away with the house edge. With this system, gamblers can deal directly with the casino without having to pay additional fees.
Even brick-and-mortar casinos have started implementing blockchain solutions. Blockchain-powered slot machines are already in place in some gambling houses. They have the same functionality as regular slot machines, but in addition to the regular functions, they also accept cryptocurrencies and track transactions by way of blockchain.
Blockchain technology and cryptocurrencies are indeed taking the gambling industry by storm, causing major disruption. But this is the kind of disruption that is worth welcoming, as it can only bring some good to the industry. And the gambling industry is far from the only sector within the entertainment industry that has come to recognise the advantages blockchain and cryptocurrencies have to offer. It appears that these technologies are most definitely the way of the future.