Cryptocurrencies have taken over the world in the last few years, completely changing numerous industries. In Q1 of 2021, the global bitcoin transactions reached 367,536 per day. By 2023, the global blockchain market is expected to grow up to $23.3 billion (about £18.7 billion). With such a huge influence, it is inevitable for crypto transactions to be integrated into online gambling as well.
There are many reasons why crypto has become so popular and why many gambling operators saw the potential of crypto transactions. As interactive gambling is growing exponentially all over the world, there has been a huge demand for more innovative and hassle-free payment solutions.
With so many perks that crypto payments can offer to online gamblers, it comes as no surprise that crypto gambling has become one of the latest trends in the industry. Of course, it is not all smooth sailing for crypto gambling as there are some jurisdictions that have outright banned the use of crypto transactions at virtual casinos and sportsbooks. That said, many believe that blockchain payments will quickly take over the iGaming scene as this industry is constantly evolving and trying to stay abreast with the latest global solutions.
If you are interested in the reason behind the popularity of crypto gambling and how this sector is expected to develop, we suggest you continue reading.
How Crypto Gambling Works
The way crypto gambling differs from standard gambling is that you will use cryptocurrencies to fund your gaming balance and place bets on your favourite casino games. Your winnings will also be credited to your gaming account in the respective cryptocurrency you have selected for your payments. That way, you will be able to withdraw your casino/sportsbook profit in the cryptocurrency you prefer to use, allowing you to utilise your funds for other crypto transactions or reinvest them in your virtual gaming experience.
Bitcoin is definitely the most commonly used crypto coin on gaming and betting websites, with some casinos catering exclusively to Bitcoin users. That said, a wide range of other cryptocurrencies can also be found on numerous gaming websites, allowing players to handle their deposits and withdrawals using Ethereum, Tether, XRP, Dogecoin, Litecoin, Bitcoin Cash, and more.
Reasons Why Crypto Gambling Is Becoming a Trend
There is no doubt that crypto transactions are getting more popular and sought after, with statistics showing that there is a new Bitcoin-related post online every three seconds.
Naturally, digital currencies are becoming a trend among online players as well, with cryptocurrencies offering a myriad of benefits to their users.
Secure payments
Security is probably one of the top reasons for players to choose cryptocurrencies for their gambling transactions online. After all, this is one of the best features of crypto transactions, enabling players to top up their accounts without providing anything else but their wallet address. Cashing out your winnings from an online casino is also very secure when you are transferring your funds to your crypto wallet.
Anonymity
Yet another advantage of crypto gambling is anonymity, which is something that many players and bettors would appreciate. Regular online casinos might require a copy of a bank statement to verify the identity and available funds of players. What is more, payments to or from gambling websites can be easily traced back to your bank account, making your gambling payments anything but anonymous. Meanwhile, crypto payments cannot be traced, allowing you to enjoy your online gambling without exposing where you spend your money.
Speed of transactions
Another great advantage of the payments carried out via cryptocurrencies is the speed of transactions. Payments are processed within minutes, without requiring you to fill out any bank or card details or log into any type of account. As withdrawal requests may take longer to be approved by casinos, crypto deposits tend to be faster. That said, once a withdrawal is accepted, your winnings are transferred to your crypto wallet in no time.
Fewer limitations
As crypto payments are processed in a much different way, they are rarely subject to any limitations that may apply to other payment solutions. Since players residing in certain countries may not be allowed to revel in online gambling, they can resort to placing bets at crypto casinos. Such websites easily allow players from different countries to make wagers in bitcoins or other crypto coins and collect their winnings in the same cryptocurrency.
Reasons Why Crypto Gambling May Not be Suitable for Some Players
Even though crypto gambling is getting extremely popular thanks to the numerous advantages it offers, it is still not the right option for some online players.
Crypto payments have their downsides when it comes to using them for online gambling, with the legality of such platforms being one of the concerns surrounding crypto gambling.
Lack of central governing body
Even though this is also considered one of the advantages of cryptocurrencies, the lack of a central governing body is also one of the downsides of the popular crypto payments. Thanks to blockchain technology, crypto transactions are carried out from peer to peer. With no central bodies keeping track of transactions, they cannot be traced by governing bodies like banks. When it comes to online gambling, some people are worried about using crypto payments that are not governed by any central body.
Restricted in some countries
Even though crypto payments allow players from different countries across the world to gamble online, there are still some limitations imposed by certain jurisdictions. Countries like Morocco, China, Egypt, and Iraq have forbidden the use of Bitcoin at online gaming and betting sites. This means that crypto casinos will not be available to residents of certain countries.
Fluctuations in price
One thing to keep in mind is that the price of cryptocurrencies is very volatile due to the high number of various crypto coins in the market. Due to the fluctuations in price, you may withdraw more if the crypto coin has a higher price but the opposite is also true if the coin is on the lower side of the dollar. The good news is that most crypto casinos accept various crypto coins, allowing you to choose the one which can bring you more bountiful payouts.
The Way Crypto Influenced the Overall Online Gambling Scene
Since cryptocurrencies have become extremely popular, they are widely accepted at numerous virtual casinos, even if they are not catering specifically to crypto users. To encourage players to wager via Bitcoin or other crypto coins, some virtual casinos even offer promotions that are exclusively available to players using cryptocurrencies.
Moreover, there are online gaming and betting sites that work only with cryptocurrencies. Such websites appeal to many online players as they are not required to go through KYC procedures just to wager money online.
Crypto transactions have become the gateway to a new world of easy payments, allowing you to experience even gambling in a whole new way. With humankind constantly striving to outdo itself, virtual realities have become more integrated into the real world than ever before. That also includes the gambling scene which is continuously trying to make the virtual experience more realistic and widely accessible.
While metaverse casinos can be considered as extensions of typical online casinos, you will be able to use only cryptocurrencies in metaverse casinos. Thanks to decentralised gambling, players can enter a new virtual world where they can enjoy more transparency as bets and winnings are recorded on the blockchain. With metaverse gambling being fairly new, there are still many things to be explored and improved. That said, thanks to crypto transactions, a new era of virtual gambling has entered the market.
Currently, the most popular casino area in the metaverse can be found at Decentraland, which is a decentralised virtual reality running on the Ethereum blockchain. When we are talking about crypto gambling and metaverse casinos, we cannot ignore the increasing popularity of NFT (Non-Fungible Tokens). Among the various casinos one can find in Decentraland, there is ICE Casino. While it features a few free-to-play games, to be able to take a seat at the VIP poker table of the metaverse casino, you are required to have an NFT wearable.
The said NFT wearable can be considered as your ticket to sit on the VIP table and play poker. The wearable can also be used to earn passive income through smart contract delegation. Moreover, you can rent out the wearable to other players who wish to gamble via NFTs and generate income by charging a commission.
An interesting virtual casino game that also makes use of NFTs is Slotie. It combines the gaming style of typical slots with more than 10,000 unique tokens. The NFTs that may be won by playing Slotie can also be used in over 150 online casinos around the world.
Provably Fair Gambling
One of the main requirements that virtual players have for the online casinos where they play is fairness. While most licensed operators are following strict licence guidelines to ensure the fairness of the games they provide, the Bitcoin community has come up with a new way to prove the fairness of gaming websites.
Crypto casinos are relying on innovative cryptography to ensure that the results of all of the games they are offering are free of any bias. Such casinos are utilising an algorithm known as provably fair, which relies on the benefits of the blockchain to prove the fairness of casino games.
There are several ways for the provably fair algorithm to be implemented at crypto casinos but we will cover the most common one. Every time a new hand/round is played, the algorithm calculates a result which is based on three variables:
- Serverseed – this type of variable is provided by the crypto casino itself
- Clientseed – this variable is available thanks to the browsers players are using to wager at the casino
- Nonce – this type of variable gradually increases by one with every hand/round of the game that is played, allowing plates to keep track of all hands/rounds at the end of a gaming session
Prior to starting the gaming session, you as a player are given a hash of the serverseed. This type of information is provided in encrypted form, containing the game you are about to wager your money on. That way, it is ensured that the casino will not be able to meddle with the game in any way while you are playing. Moreover, the encrypted form in which you are given the game you are about to play ensures fairness for the casino itself as there is no way for players to predict the outcomes of the hands/rounds they are about to play.
You are given a hashed serverseed once you are done with your gaming session. This will also allow you to reveal the previous unhashed serverseed of the game. That will allow you to compare the hashed and unhashed serverseed and see if you have been cheated on.
The provably fair method is just another reason why many players enjoy playing at crypto casinos. Thanks to the option enabling players to verify the fairness of games themselves, they can be certain that the results of every hand/round they play are completely free of any bias.
The Legality of Crypto Gambling
Gambling has always been a very prominent sector in the UK, with both locals and tourists enjoying many of the gambling opportunities they are offered. With the UK leaving the EU, it has established its own regulations on gambling and crypto transactions. If we are talking about the crypto use laws implemented in the EU, we can conclude that the countries in the EU have a very liberal approach to crypto transactions. That said, when it comes to the use of cryptocurrencies for online gambling, the UK has imposed certain restrictions.
Gambling operators who wish to offer crypto gambling services to their customers in the UK must ensure that they can provide a legitimate source of funds proof. This should be done before the company applies for a gambling licence from the UK Gambling Commission (UKGC). As for British players, there are no serious limitations, as they are allowed to use cryptocurrencies in virtual casinos that have obtained the proper licences and permissions from the regulatory authorities.
Even though the UK, countries from the EU, and numerous other jurisdictions have quite a liberal approach when it comes to crypto gambling, that is not the case in every part of the world. The Malta Gaming Authority, for example, does not issue licences to operators who have implemented crypto payments into their operations. Even though Malta is constantly pressured to acknowledge the popularity of Bitcoin and allows crypto gambling, currently, this is not a possible alternative when playing at a virtual casino licensed in Malta.
Meanwhile, in 2020, the city of Hong Kong has introduced its own regulations on crypto transactions. The special administrative region also allowed players based in Hong Kong to utilise crypto coins for online gambling, adding yet another region to the global crypto gambling scene.
Conclusion
Crypto payments have taken over the world as they are easily integrated into most technologically advanced industries. The gambling scene has also quickly adopted crypto payments, with crypto casinos and sportsbooks becoming a trend in the last couple of years. Thanks to the numerous advantages of the blockchain, crypto gambling has become extremely popular among players from all around the world.
Crypto payments have also become the gateway to metaverse casinos and NFT gambling. Virtual players have shown huge interest in both niches, especially during the global pandemic. With new forms of online gambling and innovative crypto payments, the future of combining virtual reality with real-life casino experience sounds quite exciting. While crypto gambling may be just a short-living trend, it also has the potential of becoming the most preferable way to enjoy virtual gambling.
