The cryptocurrency market has experienced tremendous growth in recent years. As blockchain technology advances, there are more and more options for its application — and iGaming is at the top of the list.
Compared to fiat currencies, cryptocurrency turnover is still low. However, if we analyze the Google trends data for the query “bitcoin casino,” a steady growing interest in the topic can be seen. There are a few factors that contribute to the popularization of the iGaming trend.
The iGaming industry is always on the cutting edge of innovation. But what impact have cryptocurrencies and blockchain technologies had on the evolution of the industry, are these changes positive, and how will the industry develop in the near future?
Representatives from Slotegrator, which has been developing software for the gambling business for more than 10 years, have addressed some of these issues.
How do blockchain casinos work?
Blockchain technology provides a high level of encryption. Every transaction is added to the ledger, which is an immutable block of data, and verified by a decentralized blockchain network. Transactions take place directly between crypto-wallets, prohibiting the involvement of a third party, so it minimizes the possibility of fraud and eliminates the need to pay a commission for the transfer.
While national currencies are backed by a state, cryptocurrencies are supported by a decentralized ledger that records every transaction. The ledger is distributed over a large database with a million copies. This has a few consequences: firstly, anyone who has access to the network can verify the transaction; secondly, the history of a bitcoin cannot be faked. Any attempt to falsify a single block will affect every block in the network. The transparency and security of decentralized public records are a huge selling point for many players.
In crypto casinos, blockchain technology is used at the development stage, allowing automated payments using smart contracts. But opening a purely blockchain casino could restrict operators to those games that are also developed on the basis of blockchain technologies. On the other hand, more and more gambling sites are accepting payments in cryptocurrencies alongside existing fiat currencies. This gives them the opportunity to reach a wider audience. For the convenience of the user, crypto payment systems make it possible for players to make a deposit in cryptocurrency but see the amount in their account indicated in fiat currency (for example, in USD). That way, the user can use the currency to which he is accustomed.
For example: a player wants to bet $100; he selects the amount of $100 and makes a deposit in BTC. As a result, $100 appears on the player’s account in the online casino. He starts playing. He wins $50 and wants to withdraw it. When he goes to withdraw funds, he selects “Withdraw via crypto” (since according to the Terms and Conditions, the player can only withdraw by the method that he used to make the deposit) and withdraws $50. After the casino confirms the withdrawal of the money, the player receives the equivalent of $50 in Bitcoins in his crypto wallet.
Slotegrator’s Bitcoin Casino is an innovative type of gambling platform with integrated cryptocurrencies that guarantee high transaction speed and secure payments.
Why do players and operators like crypto casinos?
There are plenty of reasons why operators are opening crypto casinos — and why players are flocking to them.
Operators see the value in crypto casinos because cryptocurrencies are secure, transparent, and popular with their target audience. Players are drawn to crypto casinos by the security and transparency as well, but they also value the speed, anonymity, and decentralization.
Furthermore, crypto casinos often feature smart contracts, which automate payments, and provable fairness, which automatically verifies the results of a game. For many players, this definitely creates a heightened sense of trust.
Withdrawal speed is also important for players. Most payment methods involve a third party, like a bank or a payment service provider. This means that when players request a withdrawal, it can take hours or even days. Cryptocurrency withdrawals, however, occur wallet-to-wallet, and sometimes take just minutes to register.
Are there any disadvantages to crypto casinos?
Crypto casinos are still a relatively new phenomenon, so as of yet, there is very little legislation — in any market — that explicitly applies to them.
Gambling regulations usually focus on the following areas:
- Operator transparency
- Anti-money laundering (AML)
- Combating the financing of terrorism (CFT)
- Fraud deterrence
- Responsible gambling
However, due to the increased anonymity that cryptocurrencies promise (the address of the wallet is stored in the blockchain, but not the name or email address of the holder) governments could potentially see cryptocurrency gambling as an avenue for illicit funding and move to introduce more legislation in the future. For now, however, that doesn’t seem likely to happen anytime soon.
Another potential downside is the volatility of the currency. The spikes and dives in the price of Bitcoin, Ethereum, and others have kept investors’ hearts in their throats in recent years. Fluctuations in price could add an element of unpredictability to operators’ balance sheets.
Overall, however, the advantages of a bitcoin casinos far outweigh any potential disadvantages.
What are the projections for the future?
Considering the prevalence of cryptocurrencies, we can expect the number of new blockchain casinos to keep rising. Gambling platforms, as a rule, follow the preferences of their users in all respects: the diversity of gambling content and its providers, the quality of service, compatibility with mobile devices, the bonus system, and so on. Due to the regulation of gambling activities in different countries, payment methods are a key factor in attracting and retention of players.
The future of iGaming clearly includes the trend towards the adoption of bitcoin as a means of payment and deposit. So, the demand for blockchain casino development will be relevant in the long term.