The cryptocurrency market has experienced incredible growth in recent years. As blockchain technology advances, there are more and more options for its application and iGaming is at the very top of the list. Compared to ‘fiat’ currencies, cryptocurrency turnover is still low, but the Google trends data for ‘Bitcoin Casino’ suggests a growing interest. There are many factors that contribute to the popularisation of an iGaming trend, and 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 this sector evolve in the near future?
We are not experts, but thankfully our friends at Slotegrator are and so, with more than a little help from their PR specialist, Olga Yepimakhina, we can introduce the trend that so many are talking about…
How do blockchain casinos work?
Blockchain technology provides an elevated level of encryption. Each transaction is added to a ledger, an immutable block of data, and verified by a decentralised blockchain network. Transactions take place directly between crypto wallets, prohibiting all third-party involvement. This minimises the possibility of fraud and eliminates any need to pay commission for the transfer. While national currencies are backed by a state, cryptocurrencies are supported by a decentralised ledger that records each transaction. The ledger is distributed over a large database, with endless copies. This means that firstly, anyone with access to the network can verify the transaction and, secondly, the history of a Bitcoin cannot be faked. Any attempt to falsify a single block will affect every block in the network. This transparency and security of decentralised public records is a huge selling point for players. In crypto casinos, blockchain technology is used at the development stage, allowing automated payments using smart contracts. But opening a purely blockchain casino would currently restrict operators to those games that are developed on the basis of blockchain technologies and so those gambling sites in the sector tend to accept payments in cryptocurrencies alongside existing traditional ‘fiat’ currencies, enabling them to reach the widest possible audience.
Why do players and operators like crypto casinos?
There are many reasons why operators are opening crypto casinos, and why players are flocking to them. Operators see value because cryptocurrencies are secure, transparent and popular with their target audience. Players also welcome the security and transparency, but they also value the speed, anonymity and decentralisation. Crypto casinos often also feature smart contracts that automate payments, and provable fairness, which automatically verifies the results of a game. For players, this creates a heightened sense of trust. Withdrawal speed is also important for players. Most payment methods involve a third party, like a bank or payment service provider, and so when players request a withdrawal, it can take hours or even days. Cryptocurrency withdrawals occur wallet-to-wallet, often taking just minutes to register.
What are the disadvantages of crypto casinos?
Crypto casinos are a new phenomenon, and so there is little legislation that explicitly applies to them. Gambling regulations usually focus on areas such as operator transparency, anti-money laundering, combating the financing of terrorism, fraud deterrence and responsible gambling. Due to the anonymity that cryptocurrencies guarantee (the address of the wallet is stored in the blockchain, but not the name or email address of the holder) governments may view cryptocurrency gambling as an avenue for illicit funding and move to introduce more legislation in the future.
Another potential downside is currency volatility. Although the players are all happy to gamble, sharp fluctuations in the prices of Bitcoin, Ethereum and others could add unwanted unpredictability to operator balance sheets. However, it would be true to say that, overall, the advantages of a crypto casinos currently far outweigh any potential disadvantages.
What might the future hold?
We should all expect the number of blockchain casinos to keep rising. Gambling platforms follow the preferences of their users, the diversity of content and its providers, quality of service, compatibility with mobile devices and so on. Due to the regulation of gambling activities in different countries, payment methods are a key factor in attracting and retaining players. The future of iGaming clearly includes the trend towards the adoption of cryptocurrencies as a means of payment and deposit and so, demand for blockchain casino development will continue to remain relevant for the foreseeable future. For further advice and information, please do visit www.slotegrator.com