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Satoshi Nakamoto, the pseudonym of the Bitcoin creator, developed cryptocurrencies as a medium of payment and a store of value. The other cryptocurrencies that followed had similar or more advanced use cases. The way cryptocurrencies redefined payments was a clear indication that they will soon become a part of many other industries apart from pure account-to-account digital payments.
An industry such as online gambling that vastly deals with payments couldn’t have been an exception. With the wide range of benefits cryptocurrencies and its underlying technology blockchain brought to the table, online casinos and gambling platforms were ready for disruption.
What are Online Casinos
Not everyone can afford the luxury of buying a ticket to Las Vegas and betting hundreds of thousands of dollars in five-star casinos. To meet the demand of such people, who quite certainly form a vast majority of our society, we saw the evolution of online casinos.
The first online casino launched in 1994 and brought the concept of brick and mortar casinos to the internet. The availability of virtual casino games largely reduced the barrier to entry and attracted more people into the gambling industry. These casinos allowed people to make their bets from the comfort of their homes and pay using bank accounts or other payment providers.
Since its inception, the online gambling industry has grown into a multi-billion dollar market. Reports predict that it will grow into a $92.9 billion industry by 2023.
What are Crypto Casinos
Crypto casinos or Bitcoin casinos is the newest category of online casinos. While online casinos made casino games more accessible, the integration of cryptocurrencies and blockchain technology into online casinos added another level of excellence to them.
Crypto casinos aim to replace the use of traditional payment methods, intermediary-operated games, almost opaque result declaration processes, and other vulnerabilities and shortcomings of the gambling platforms.
Crypto Casinos vs. Online Casinos
On the surface, many may say that the only difference between crypto casinos and regular online casinos is that the former allows cryptocurrency payments instead of fiat payments. The truth cannot be far from it. There are several other differences between the two.
Cryptocurrency casinos often utilize blockchain-based smart contracts to operate their casino games. These smart contracts are self-executing computer codes that negate the use of middlemen in a transaction or gambling process. As they are stored on decentralized public ledgers called blockchains, they maintain the highest levels of transparency in their working process and transactions.
Some of the best bitcoin casinos utilize smart contracts that make the games provably fair. This means that the users can cross-verify the result of the games to check if the results were genuine or biased in any way. The codes of smart contracts are stored in public systems, allowing anyone to audit the code and check the integrity of the smart contract that operates a crypto casino game.
In addition, the code of smart contracts, once deployed on a blockchain, is immutable. Due to this feature, there is no possibility for the owners of a crypto casino to tamper with the code of a smart contract to manipulate the results of the games.
The same is not possible on regular online casinos. The codes of the games are stored on centralized servers and can be changed at any time. They also lack transparency in their operation process and the results cannot be verified by the users for any possible manipulations.
Online casinos often require users to signup on their platform and give away their personal identification to start participating in the games. Even without that, the addition of the payment details for deposit and withdrawal of payments gives away a user’s credentials to the gambling platforms.
On a crypto casino, users mostly only need to provide their wallet’s public key for deposit and withdrawal of supported cryptocurrencies. And the public keys of a cryptocurrency wallet do not reveal the identity of the wallet owner. This makes crypto casinos anonymous.
Payments on regular online casinos can be slow and tiring. In the case of international payments, the payouts can be even slower due to the hassle involved in cross-border bank transfers.
Cryptocurrencies, on the other hand, are global currencies with no geographical barriers hindering their operations. Hence, the rewards reach the winner’s account only minutes after the declaration of the results. The process is made even faster due to the automated smart contracts that do not need any intermediary interference for payment execution. They automatically send the rewards to the winners upon completion of the games.
As many crypto casinos use blockchain technology at their core, they provide premium data security. Blockchains are immutable ledgers, and it is next to impossible for anyone to hack the stored data, tamper with it or decrypt it. This is possible as blockchains do not have any central points of failures that hackers may target and attack.
That is quite unlike traditional online casinos that store their data on central servers. In March 2020, a ransomware group called Maze even hacked the data of BetUS, a U.S.-based online gambling platform.
With the present regulatory scenario, this is one of the major advantages traditional online casinos have over crypto casinos. Cryptocurrencies are not properly regulated throughout the globe, and there may be many crypto casinos that do not abide by the laws. But there are also those that offer legal services only.
However, there’s a better chance that regular online casinos follow the regulations as it is easier when dealing with fiat currencies. But with governments working on better regulatory frameworks for cryptocurrencies, the same may soon be possible for all crypto casinos as well.
Crypto Casinos are the Future of Online Gambling
Online casinos powered by blockchain and cryptocurrencies bring an array of benefits to traditional online gambling platforms. They are an upgrade to online casinos as they prioritize user anonymity and personal data security — the two major concerns of internet users today. Better regulations and the wider adoption of cryptocurrencies will potentially make crypto casinos more common throughout the industry.
Andrew is a writer that does most of his work on cryptocurrency-related topics. While he’s primarily interested in Bitcoin, he also follows major altcoins and the innovative ideas that new cryptocurrency and blockchain projects are bringing to the table.