More and more operators prefer the system of crypto payments refusing to accept standard fiat currencies. However, the increased interest in the digital currency causes a number of questions. In this article, we will take a closer look at the usage of cryptocurrency in gambling, what are the advantages and disadvantages of this modern technology in the gambling business.
Cryptocurrency in a nutshell
Cryptocurrency is virtual money, which unlike fiat currencies does not have physical equivalent (gold, etc.). It all started on 31 October 2008, when one of the IT-forums published an article about the prospects of using the digital money "Bitcoin: A Peer-to-Peer Electronic Cash System». It first featured the name of the most popular cryptocurrency of our time “bitcoin".
On 9 January 2009, the first version of the bitcoin wallet was released. It was created as a quick and easy way of mutual settlements between people. Completely anonymous, beyond the control of the government, and with minimal fees. It is also worth mentioning that all the transactions are completely transparent.
Advantages of cryptocurrencies in gambling
Today, cryptocurrency is actively used in online casinos instead of or as a complement to standard payment methods, due to their undeniable advantages. Those are:
Full anonymity. The blockchain technology provides users with anonymous cryptocurrency transactions. The wallet number is the only publicly available information during the transaction. When registering, the owners of wallets do not specify any personal data and use a pseudonym, which ensures their complete anonymity.
Fast payments. All cryptocurrency payments are conducted without bank interference or any third parties. Since all transactions are carried out directly between the user and the operator, the accrual takes a minimum of time.
No double conversion. Bets that are made in cryptocurrency exclude double conversion, which significantly reduces transaction fee, thus expenses of gamblers..
Zero commission. Any crypto-transactions are made without the bank intervention, which means there are no commission fees for users.
Access to payment history. Records of all money transfers are stored in a public blockchain database. Therefore, in case of ambiguous situations, you can always check the information.
Fully protected wallet. User's wallet is effectively protected due to the secure procedure of identification and password. Even if the hackers manage to access the gambling site database, they will only see the administration tools.
No geographical limits. Players can bet even in the countries where gambling is banned.
Despite the undeniable advantages of using cryptocurrency, the technology still has some downsides.
Disadvantages of cryptocurrency in the gambling business
High volatility. The cryptocurrency course depends on various factors, like newsbreaks, etc., which means you have to be ready that the course can change dramatically within a short period.
Risk of losing money. If you forget the password to your wallet, access to crypto-money will be lost forever.
Uncertain legal status. The authorities of many countries haven't specified their attitude to the crypto yet. Some states are seeking for compromise concerning the regulation of cryptocurrency usage, while others are considering it wrongdoing.
Statistics on the bitcoin casinos for 2017
Bitcoin casinos make the gamblers sure that their data is confidential and the transactions are fast. Online gambling is a huge industry. In 2016, its volume amounted to $46 billion, and so far, Bitcoin has captured only a small part of this market. However, the demand for crypto-money in online casinos is growing every year.
According to Bitcoin Strip, more than 24.5 billion crypto-bets have been made in the last two years. In 2017, the popularity of bitcoin casinos has only increased. According to the statistics, in 60 crypto-casinos, people make 337 bets per second spending 3 BTC in a minute. Moreover, since 2014, about 3.7 million BTC were spent on bets, which amounted to 4.5 billion USD.
Malta is a Blockchain Island
Blockchain and Distributed Ledger are the breakthrough technological innovations that can transform the financial sector in Malta. After the government announced its decision to grant Malta the status of "Blockchain Island", the interest to ICO there grew a lot. Like everything that is innovative, DLT and cryptocurrencies bring to the fore a number of challenges and opportunities for all stakeholders, whether regulators, players or investors.
MFSA (Malta Financial Services Authority) is a public authority that regulates the credit and financial sector.
Two major problems faced by the MFSA:
- risk of fraudulent activity in ICO;
- the usage of crypto assets for money laundering.
The blockchain technology itself has a number of tools that, thanks to transaction monitoring, can help prevent and eliminate the above risks.
As for the future prospects of the blockchain, the latest news confirm that the EU financial contributions allocated to the improvement and development of the technology.
A striking example belongs to one of the largest investment banks in the world, Goldman Sachs, which introduced cryptocurrency into a number of its digital products. Thus, in 2018, according to The New York Times, Goldman Sachs announced the launch of a special service for trading Bitcoin futures. The exact launch date is not yet known, but the bank management members have already approved the initiative.
Therefore, we only have to wait when the service enters the market. However, probably not all cryptocurrencies will be able to stay afloat until their full adoption.