Cryptocurrency has changed the face of the gambling industry in so many ways. Gambling via online casinos is illegal, save in six US states, and even then, there are strict regulations in place to prevent money laundering and other such activities. However, these laws didn’t exactly control blockchain technology. This proved advantageous to those online casinos which accepted wagers made via crypto since they would receive more traffic and advertising. In many cases, users would only need to provide their email addresses in order to register.
Blockchain is a technology that traces and records data, distributing and duplicating them across several networks, as well as matching them to maintain accuracy. The advantage is that it becomes extremely difficult to alter the data and to do so, one would need to change all entries. As a result, it’s more secure than traditional record-keeping methods and is a valuable way of logging transactions.
Initially, casinos were a bit skeptical, but many began accepting cryptocurrency payments. Currently, new rules have been put in place regarding cryptocurrency payments, which vary depending on the particular US state, as they are allowed to formulate their own regulations. Michigan for example allows “e-wallet” transmissions, providing the “administrator” possesses a license. Cryptocurrency is a natural fit with Michigan Online Gambling but the level of regulatory scrutiny makes gaming businesses cautious about the innovation.
Regardless of the stringent guidelines, cryptocurrency payments do have a few great benefits. Security and accuracy are two of the main advantages since the decentralization of data reduces falsities. Each transaction is recorded in a ledger, which is then distributed, validated, and compared with other transactions. With this method, both gamblers and casinos are protected.
Another added benefit is that there is no particular requirement for the input of personal information. Credit card details are not mandatory, and validation of one’s identity isn’t necessary, hence personal and account information is kept safe. Cryptocurrency can be deposited, validated, and in a few simple steps, a user can begin placing their wagers. The online casino would only possess a bettor’s wallet address, thereby protecting illegal trades, and reducing the risk of hacking and duplication of payments.
Utilizing cryptocurrencies also ensures efficient transactions. Given that data is decentralized, it nullifies the need to validate the information. As a result, the transfer occurs quicker, hence lowering the cost of transmitting crypto. Thus cryptocurrencies are typically more cost-effective as compared to other payment methods.
There is no requirement for third-party approvals, allowing a user full authorization of their cash. They are able to deposit and withdraw in real time as transactions are verified instantly. In turn, the casino would know of the success or failure of the transaction immediately.
In addition, blockchain technologies such as cryptocurrency facilitate a high level of transparency in the online gambling field. Many individuals place very little trust in casinos or the betting industry in general. Most are of the opinion that the system is designed to rob them of their cash and reduce winning possibilities. However, cryptocurrency, seeing as multiple entries of transactions (wins, losses, and payouts) are recorded permanently and transparently, negates the risk of fraud.
The straightforward acceptance process provided by blockchain technology allows a smooth transition from registration, creating efficient operation without the requirement of personal information. Ergo, in contrast to non-crypto-accepting casinos, they would most likely accumulate a larger number of users who can register simply by username and email address.
Of course, there are also some disadvantages to using cryptocurrencies to gamble. A prime example is those who suffer from gambling addictions. There are no limitations to restrict them from playing as other gambling services do, like the ability to ban yourself from playing. An addict who wished not to be named spoke to NBC News concerning the addiction mitigations offered by such casinos.
“I’d done everything I could locally to stop myself from doing it, and all of a sudden there was this Hail Mary,” he said. “I could self-exclude 20 times and it wouldn’t make any difference, because you can just go back and make another account.”
Another risk of cryptocurrencies is the instability of the market since it is constantly changing. A valuable currency may not be as valuable by the end of the night, unlike traditional government-issued currencies which may see minute changes in value over time. These shifts in value may prove to be a challenge for both casino operators and gamblers alike.
Nevertheless, cryptocurrency may turn out to be the future of online gambling, as it provides security, efficiency, and transparency. Many casino operators have begun integrating the cryptocurrency payment method due to its many benefits.
