We have seen increasing adoption and acceptance of cryptocurrencies in various industries and sectors since the beginning of 2020. The likes of Bitcoin and Ethereum are far more widespread today and can be used on a number of online platforms, which is a far cry from the situation just a year ago. One of the sectors that has completely embraced this is the online gambling sector. Online gambling has probably provided the earliest use case for cryptocurrencies online, and its history goes back to as early as 2011, when cryptocurrencies were still a niche and largely unknown phenomenon.
The online poker site Switchpoker.com was the first to offer its users the option to use Bitcoin on its platform, back in August 2011. The next big development in this space came in 2014 when we saw the first licensed Bitcoin casino, called Bitcasino.io, receive a license from the Curacao Gambling License Authority in February 2014. Up until this point, Bitcoin was the only cryptocurrency to be used for online gambling. That changed with the launch of Cryptogames in August 2014, which allowed other cryptocurrencies to be used as well. Another notable development was the launch of Satoshi Dice in April 2012 by Erik Voorhees, who is one of the earliest Bitcoin adopters. It was responsible for 50% of all traffic on the Bitcoin network at one point, showing its popularity, and was sold to an anonymous user for 26,315 BTC in July 2013. The value of this sale was around $11.5 million at the time, but of course today those tokens would be worth more than $1.2 billion, which is a reflection of Bitcoin’s rise. Of course, today, there are multiple crypto gambling sites available, such as Cloudbet, mBit, BitStarz, 7Bit Casino, and many more.
With so many available options, it is important to understand the advantages and disadvantages of crypto gambling over fiat gambling before entering this space. Online gambling has been around for a long time, but the use of blockchain with crypto gambling has proved to be quite a game-changer, and here we will list the advantages that crypto gambling has over regular online gambling.
Better privacy – Crypto gambling does not need players to add banking details, account information, and credit card numbers to their accounts to facilitate transactions, which makes it much safer, as well as affords privacy to users
Anonymity – This is a related advantage, as the lack of a need to add banking information to gambling accounts ensures that users can be completely anonymous if they wish. There are some cryptocurrencies such as Monero which are extremely private and may even be preferred for use at crypto casinos
Speed – One of the biggest issues with using fiat currencies at online casinos is that transactions can take a long time to go through, sometimes taking days. This is of course a hindrance, and cryptocurrencies offer a huge advantage here, as crypto transactions are typically confirmed in seconds, taking up to a maximum of an hour, which is still much less than the time taken by fiat transactions
Lower fees – Transaction fees for crypto transactions are often zero, or minimal at best. This is because there are no banks or third-party payment processors involved
Fairness and transparency – The use of blockchain networks by crypto gaming providers ensures that the games on these sites are fair, and not rigged in favour of the operator. Records are stored on the blockchain and cannot be altered, which means that proof of any fraud or wrongdoing is always available
Better odds – Crypto casinos will usually have better odds than fiat-based casinos, due to lower costs
However, there are some disadvantages of using crypto-based casinos as well –
High volatility – Cryptocurrencies are extremely volatile, and so the value of players’ holdings and winnings can change drastically in a small period of time
Anonymity – this is an advantage as well as a disadvantage, as it becomes extremely difficult to identify users who may be fraudulent or using crypto for illegal activities
Thus, as we can see, there are pros and cons to using cryptocurrencies at online casinos. The crypto market is expanding rapidly, and we are seeing more and more crypto casinos being brought into the market as well, so this does look like being the future of the industry. Users should therefore do their due diligence and know all the implications before using crypto for online gambling.