At this point, we’ve all heard of cryptocurrency. You’ve probably also heard of cryptocoin casinos; online casinos that will allow you to deposit and withdraw using one or more cryptocurrencies. There are even what you might call purely crypto casinos. They deal exclusively with cryptocurrency transactions — no “real money” allowed.
For many gamblers, cryptocoin casinos are still a bit too “wild west”. They’re unregulated. They are obviously not using the same software everyone is accustomed to seeing on most online casinos, and there’s a lot going on behind the scenes that most people don’t quite understand.
It’s easy to understand why people would be a little apprehensive about playing at a cryptocoin casino — or converting their money to cryptocurrency in the first place. If you dig under the surface a bit, however, crypto casinos have quite a few benefits that could actually put them far ahead of traditional online casinos in the not-so-distant future.
Please note that this section refers exclusively about cryptocoin casinos. If you don’t feel ready to go full power into the crypto world, you can always check our section with Bitcoin Casinos. Those casino sites still accept traditional payments besides the most popular cryptocurrencies.
How A Cryptocurrency Blockchain Works
Cryptocurrencies run on what is known as a blockchain. A blockchain is basically a public ledger of transactions maintained by a network of thousands of independent computers. This network of computers verifies and re-verifies transactions to make sure that everything is correct.
To put things in simple terms, there is a “majority rules” philosophy built into the system that keeps anyone from tampering or altering the blockchain with fraudulent transactions. Nobody can slip a fraudulent transaction into the chain. It must be verified by multiple independent sources to be accepted. Finalized transactions then become a permanent part of the public chain.
The public blockchain will contain all transactions for the cryptocurrency it represents. With Bitcoin, for example, which has existed for almost 10 years now, it is possible to examine the blockchain all the way back to the very first Bitcoin transaction ever made.
What Makes Cryptocoin Casinos Special?
Transparency Through The Blockchain
Some blockchains, like the Bitcoin blockchain, only process monetary transactions. Others, like Ethereum, are more complex and allow for the programming of events. For example, a casino based on Ethereum could take your currency, which would then trigger a game to start. When the game is over, it would trigger a payment to be made back your account if you won. The decisions about what to do with the money are being made by the blockchain, not by the casino.
A casino based on the Ethereum blockchain therefore becomes completely transparent. Players can verify through the public blockchain that games are set up to pay winnings automatically. They can also verify that payments are being made. It becomes a trivial task to see if a casino can be trusted to make payouts to winners or not. It could even be possible to analyze win rates to be sure they are within acceptable ranges, proving whether or not the casino is dealing fair games.
Provably Fair Games
These casinos also know that there is some level of distrust since they are unregulated. In response, many online crypto casinos have developed what are called provably fair games. These games involve two special codes, one provided by the casino, and one provided by the player, that can be used to mathematically prove that the results of any game or series of games are fairly determined. These games eliminate any doubts about cheating, which is something no regular online casino offers.
Gambling With Cryptocurrency Is Not Illegal
As with many things related to computers and the Internet, the law lags behind. Governments don’t recognize cryptocurrencies as real currency like a Dollar, Euro, or Pound. In the eyes of the law, gaming with a cryptocurrency is the same as using play money.
Yes – The Benefits Of Using Cryptocurrency
Transactions Are Cheaper
Compared to bank transfers and credit cards, in most cases there are much lower fees or no fees at all for exchanging cryptocurrency. This allows casinos to operate with lower overhead and players to collect withdrawals without transaction charges.
Banking Options Are Irrelevant
One of the biggest problems players and gambling venues face is the difference in available casino banking and payment options from one place to another. Cryptocurrencies allow funds to go from anywhere to anywhere without restriction. The parties on each end can convert their cryptocurrency funds to cash in whatever way is most convenient for them wherever they happen to be.
Transactions conducted through cryptocurrencies can be anonymous. The two entities involved in the transaction do not need to know each other’s name or location. There is also no intermediary involved, like a bank or payment processor. The transaction happens directly between the two parties who want to exchange funds. Nothing is reported to any middleman or government entity.
No – The Disadvantages Of Cryptocurrency
Cryptocurrencies tend to have highly volatile values. Your crypto funds could gain value before you convert back to cash, but they could lose value too. It can be difficult to predict if any cryptocurrency is at a stable point and if it’s good to hold it or not.
If you’re planning to gamble with cryptocurrency, it would be a good idea to see which crypto coins the casino accepts and then research to see which of them has the best history of stable value.
Cryptocurrency Can Be Lost
Cryptocurrency is NOT stored on the blockchain. The blockchain only contains records of transactions. It does not say who owns what or how much. Each cryptocurrency has its own wallet where your funds are stored. This wallet can be online, on a website for example, or it can be on your computer, or even written on a piece of paper in some cases.
The important thing to understand is that if your wallet is lost, so are your cryptocurrency funds. If your wallet is on your computer, for example, your funds exist on your computer and nowhere else. That means if the website disappears, or your computer’s hard drive dies, or you lose that piece of paper, you have absolutely zero chance of recovering your money. It’s just as if you dropped your real wallet in the street stuffed with cash.
It is absolutely critical that if you are going to hold money in cryptocurrency that you understand how to make a backup of your wallet and you do it often. Most people would recommend you make three or four backups and store them in different places if you have more than just a small amount of money invested.
Cryptocurrency Must Be Exchanged For Cash
Although you should look to invest in a cryptocurrency with relatively stable value, you also need to be sure you’ll be able to sell it to get cash when you want to. In most cases this shouldn’t be a problem, but if you have a large amount of a crypto coin that doesn’t trade at a high volume, you might have trouble converting back to cash.
Especially if you’re in an area where online gambling options are very limited, crypto casinos could be just the right ticket to getting some action. As long as you take your time and make sure you understand how both the cryptocurrencies and the crypto casinos work, there’s no reason to fear these new gaming outlets that just might become the future of online gambling.