By using Blockchain technology, crypto currencies 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 crypto currencies (also known as crypto). The future of crypto and casinos is secure with rising gamblers participating online or on their mobile devices.
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 crypto currency. In simple terms, crypto currencies 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 dispersed to the network of users. As more and more people invest in crypto currencies, so too are the number of Blockchains growing. This increase in investor numbers adds significantly to the security of the data.
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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 crypto currency 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 purposes to trust the currency:
- Anonymity – users of crypto currency 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 – crypto currencies (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 crypto currencies 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 crypto currencies
- The perceived ‘dark side’ – crypto currency 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 now legally obliged to ask players to prove they can support their bets. As and when these establishments accept crypto currencies, the player will be anonymous.
The value of crypto currencies fluctuates, increasing and decreasing all of the time. Fluctuation creates instability for both the gambler and the casino. Many regard an investment in a crypto currency 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 crypto currency is worthless due to cryptos’ volatility.
Regulators have recognized crypto currencies as a legal tender in the gambling industry, but with the proviso that tight controls are in place to manage the risks involved.
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 accepting gambling establishments to trade with crypto currencies. 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.
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