Paying With Cryptocurrency History and Future Discussed

Online gambling and cryptocurrency are a popular match. Users prefer cryptocurrency over cash, and this trend continues. Find out why cash is no longer king.

Cryptocurrencies are a relatively new way to make and receive payments across many industries, including casinos and other online betting platforms. Across the spectrum of online organisations, casinos are the most recent converts to cryptocurrencies (also known as cryptos). 

The future of crypto and casinos runs parallel with the future of gambling, particularly with increasing numbers of gamblers participating online instead of visiting land-based casinos. If you enjoy a flutter, the Master of Casinos, Indian online casino comparisons are for you.

You can’t pick up and hold crypto in your hand or pull a bunch of notes out of your wallet. This lack of physicality doesn’t mean crypto is worthless. Cryptocurrency is an electronic peer-to-peer (i.e.shared access to files without a central server) currency. Crypto banks store these decentralised files in secure, unhackable blockchains.

A basic understanding of crypto and the blockchain technology driving this new currency is required to establish a clearer idea of its impact and future for casinos and their players.

What is Blockchain Technology and Why is It Popular in Casinos

Blockchain is a method of recording information that is impossible to change. The blockchain itself is a shared and distributed ledger that duplicates transactions across the network of computers distributed to participants in the blockchain.

Once a transaction file is blockchain stored, altering, hacking, or deleting it is impossible. As more and more people invest in cryptocurrencies, the number of blockchains grows. This increase in investor numbers adds significantly to the security of the data.

Importantly, no person controls a blockchain, making transactions 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. 

Any payment that is backed up with hard cash (stabilised cryptocurrency) is accepted at an online casino, but not all cryptocurrencies are stable – so paying with crypto is not always a possible option – we explain more later.

Where Does Crypto Benefit the Gambling Industry?

The benefits of using crypto are varied and numerous; here are a few 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, instead of physical cash, ensure secure winnings.
• No intermediary involvement – e.g. banks, regulators and tax officials.
• No fees – casinos have reduced handling fees and bank charges.
• Market stability – cryptocurrencies, e.g. Bitcoins, are often more stable than some traditional currencies (country or continent-dependant) and are predicted to be widely accepted in the near future.
• Global accessibility and availability to those who do not have a traditional bank or building society account.

We mention Bitcoin, which is relevant because the first casino to use Bitcoin was SatoshiDice. The online casino named after the Bitcoin inventor Satoshi Nakamoto was launched in 2012, three years after Bitcoin became a recognized currency. SatoshiDice was the first casino to accept digital currency.

As soon as Elon Musk endorsed crypto, specifically Bitcoin, the gambling industry widely accepted digital currencies as a form of payment, enabling gamblers who don’t have a bank account to enjoy their favourite pastime.

While Musk endorsed crypto, specifically Bitcoin, he also damaged its reputation when he withdrew from accepting Bitcoin as payment for a Tesla Car because (summarised) “Tesla has suspended Bitcoin purchases. We are concerned about using fossil fuels in Bitcoin mining and transactions, especially coal; coal has the worst fuel emissions.” 

Many crypto enthusiasts took this as a rejection of the currency as it is difficult, if not impossible, to mine Bitcoin or any other crypto coin without electricity.

The Disadvantages of Crypto in the Gambling Industry

• Non-acceptance as a payment option – while non-acceptance is rare, there is yet to be industry-wide acceptance as payment by all casinos. Players look upon casinos that don’t accept crypto negatively.
• Centralised network risk – a potential data security risk where casino hosts accept cryptocurrencies.
• The perceived ‘dark side’ – initially, cryptocurrency trading built up its popularity through the dark web with possible links to arms dealing and international crime organisations.
• Regulations – players are concerned that regulations may get in the way.
• If you pay with crypto, you will receive your winning payments in crypto – this rule avoids the possibility of money laundering.
• Casinos must ask players to prove they can support their bets – which goes against the player’s anonymity. While this is not a crypto negative, it could be a reason players will not gamble.
• The value of cryptocurrencies fluctuates, increasing and decreasing all of the time – the fluctuation creates instability for both the gambler and the casino. 

Using Crypto is a Gamble

Using digital currency is a form of gambling and has been a discussion topic for some time. While games like roulette require luck, understanding, and strategy for success, investing in cryptocurrencies can be equally unpredictable, no matter how much understanding and strategy are involved due to the amount of unforeseeable currency fluctuation.

Bad Publicity Affects Crypto and Online Gambling

Some regulators have recognized cryptocurrencies as legal tender in the gambling industry, but always with the provision that tight controls are in place to manage the risks involved. Many of the shortcomings mentioned are addressed by blockchain technology. 

Decentralisation of the files ensures that no one person controls or can tamper with the data. Verification by blockchain ‘miners’ (read – auditors) guarantees transactions’ legitimacy, ensuring a level playing field. The result is blockchain protection and eliminating data manipulation and online fraud.

The transparency provided to network users implies that all transactions are verifiable. With this technology being part of the future, it can’t be ignored by the gambling industry. However, negative publicity can affect the value of cryptocurrencies. While Bitcoin is the most popular, Litecoin, Ethereum and Dogecoin are the other digital currencies accepted by some, but not all, online casinos.

Experts predict an industry-wide transformation in the next ten years, so forward-thinking casinos will embrace the challenge. While most reputable online casinos agree that blockchain technology guarantees positive results in a quest for improved fairness and transparency in online gambling, sadly, those less reputable organisations will accept other digital currencies with no guarantee of fair play.

The Future of Payment at Online Casinos

In the last few years, the gambling industry has seen a surge in the number of crypto-gambling sites and online casinos that accept digital currency. The online Bitcoin gambling sector has an estimated size of $565 billion, with an estimated 50% of all Bitcoin transactions in some way related to gambling. 

Using cryptocurrency for gambling has numerous benefits, including instant, fee-free payouts with significant withdrawal limits. The acceptance of cryptocurrency in online casinos varies depending on the regulative laws of each country. For example, regulated casinos and sportsbooks in India do not accept digital currencies. However, as time passes, there are an increasing number of crypto-only providers in the market.

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.

The best way to play is by using your digital wallet. PayPal, Skrill, and Apple Pay are the top choices for securely depositing funds and withdrawing winnings with online casino banking. Online casino digital-friendly wallets accept all major credit and debit cards, giving players convenience and security.

The Unregulated Status of Crypto Casinos

With all that said, gambling with cryptocurrencies is still open to abuse. The tight regulations that are in place protect gamblers, and casinos can be abused at crypto casinos or casinos that only accept digital currencies. Because of the unregulated status of specific crypto casinos, keeping track of transactions and fairness isn’t straightforward. The complete lack of checks and balances has led to scams, including currency theft.

So, while players may like to stay anonymous, knowing your money is safe is also essential. Therefore, in this case, regulations are a good thing, and while, in principle, we like cryptocurrencies, we also like regular ways to pay and receive funds. 

After all, there’s nothing worse than winning at roulette or poker and finding the casino wants to pay you in a worthless cryptocurrency, so best to stick to regular payments.