Cryptocurrencies and Casinos: The Future of Gambling in The Digital Age

Since the creation of bitcoin in 2009, various types of cryptocurrencies have become increasingly common as a means of payment. The field of gambling is no exception. Here two trends of using cryptocurrency www.newonline-casinos.co.uk have formed:

• As an auxiliary means of payment. As a rule, it is used by online casinos that have long been operating in the gambling market, which widely use banking and virtual payment systems. Such establishments are characterised by a limited range of cryptocurrencies, especially for withdrawal. In some cases, access to withdrawal can be blocked due to a lack of koins of a certain type. The very process of using cryptocurrency for betting is to purchase / exchange from the administration of the casino a certain type of coins for virtual or real monetary units, which are used for betting.

• As the main means of payment. Recently, specialised online casinos for playing with cryptocurrency – cryptocasinos – have started to open. They are characterised by an extremely wide range of cryptocurrencies. The game is played on crypto. If its value is too high, the unit of the blockchain is split into a certain number of shares (satoshi), which are used for betting. Security and control of the implementation of financial activities is carried out by sales statistic for virtual goods and microtransactions in games and other similar ones.

Features of the process of playing cryptocurrency

As already mentioned, many popular cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), Tether (USDT), Litecoin (LTC) and some others have an extremely high degree of capitalisation, which provides them with a high value compared to fiat money. Therefore, to ensure the possibility of playing with small stakes began to use the so-called “satoshi” minimum possible indivisible parts of bitcoin, amounting to one hundred millionth of BTC.

The process of depositing and withdrawing winnings with cryptocurrency has no fundamental differences from the usual transfer of fiat funds. However, there are certain nuances associated with the mechanics of the formation of the application. In most cryptocasinos, the formation of transactions looks as follows.

Deposit replenishment

It is carried out in the personal cabinet in the tab financial transactions or cashier:

1. The choice of cryptocurrency is made;
2. A link with the address and route of the cryptocurrency wallet is copied and the generated qr code is scanned;
3. The amount of the deposit is entered in one field and the cryptographic key in another;
4. Confirmation of the transaction on the cryptocurrency wallet (Blockchain, Coinfy, Paxful, etc.).

Withdrawal of winnings

As a rule, traditional online casinos or cryptocasinos provide the same range of payment systems for withdrawing winnings:

• To a cryptocurrency wallet;
• To an e-wallet like Neteller or Skrill;
• To a bank card Visa / MasterCard.

The sequence of actions for withdrawal is as follows:

1. In the personal cabinet select the tab financial operations / withdrawal;
2. One of the previously listed payment systems is selected;
3. A request for withdrawal of funds in cryptocurrency or fiat money is formed.

Legality of using cryptocurrency in licensed online casinos

As far as state regulation of the use of koins as an extended means of gambling is concerned, the most loyal region is the European Union. Not surprisingly, Malta, as one of the largest regulators of gambling-related commercial activity, was the first to develop and adopt regulations that legalised blockchain as a means of payment. This allowed all without exception online casinos licensed by Malta, later and Curacao to implement on their sites electronic payment system with koins.

More stringent laws were adopted by the UK. There, to legalise the use of Bitcoin and some other types of cryptocurrencies, it is necessary to prove the legality of their origin. In practice, this is realised in the following way. According to information from the state resource Gambling Commission, online casinos with a licence UKGC (state body regulating gambling activities in the UK) should give admission to the game on cryptocurrency only if the player passes verification on the legality of the origin of the blockchain.

As for other regions, according to the International Association of Gaming Regulators the most loyal to the use of Bitcoin and other types of cryptocurrencies in the gaming industry are El Salvador, USA and Australia. In the first country Bitcoin is generally allowed as a full-fledged currency, which must be accepted for payment along with the Salvadoran Pillar (since 2004, the country has no national currency, which was replaced by the U.S. dollar and Bitcoin as a means of payment).

In the USA I and Australia there is no prohibitive legislation regarding the use of cryptocurrency in any sphere of activity, including the gaming industry.

The strictest prohibiting laws regarding the use of cryptocurrency are adopted in South Korea. And many countries in the Muslim world, in addition to banning bitcoins, also have a ban on any gambling activities.

IMPORTANT: Many international organisations regulating gambling activities are taking action to remove cryptocurrency from the shadow business. According to Casino News Daily, in many countries, the government is proposing to introduce a special licence for gaming resources as online casinos and online games using blockchain.

Advantages of Coins as a means of payment

The popularity of cryptocurrency is due to a fairly large list of advantages compared to affiliated currencies. Of the most significant, users note the following:

1. Virtually complete absence of commission fees for the implementation of the transaction. Coin turnover occurs with the involvement of decentralised virtual networks, which excludes the emergence of a regulatory body that would charge for its services. The only commission that may be charged for the execution of a transaction may be the miner’s commission. However, it rarely exceeds 0.04%, which is significantly lower than bank commissions or electronic payment systems.

2. Transaction processing speed. This indicator in cryptocurrencies is incomparably higher than in traditional payment methods using international electronic payment systems. If many online casinos reserve up to 3 banking days to receive the winnings on the Visa card, cryptocurrency gets to the wallet in 10 – 20 minutes. However, this figure can be influenced by other factors, of which the main one can be recognised as the speed of processing the request for withdrawal of funds by the BOT of the casino. And the total waiting time can increase to several hours.

3. Security. The very principle of the blockchain provides for the mandatory storage of data on all transactions that were carried out with it. Transaction with its use can not be blocked or cancelled, provided that all the requisites provided by the technology are correctly filled in. Thus, fraudulent actions with cryptocurrency are practically excluded, which provides additional trust to the online casino from the players.

4. Anonymity. It means not complete anonymity of the player, as he must undergo the procedure of authorisation, and in some cases, verification. Anonymous are transactions with digital currency, which do not require the provision of personal data. In this case, the withdrawal of funds from a cryptocurrency wallet to a Visa or MasterCard account can be carried out through electronic exchangers. In this case, the origin of the money will not be specified. Such anonymisation is very useful for players who live in countries with strict gambling prohibition in the legislation or in states that tax winnings more heavily than income tax.

Some technical and financial limitations

However, even with all the advantages that come with using coins, there are a number of factors holding back the adoption of cryptocurrency in the gambling industry. These disadvantages manifest themselves on both the provider and player side:

1. Volatility. As statistics show, cryptocurrency is a highly volatile medium of payment. Therefore, there can be a significant imbalance between the funds invested in the game and the amount of winnings in koins, which the player can withdraw from his game account. In many ways, this factor has a purely psychological impact. However, there are also purely financial aspects that are the cause of conversion losses.
2. Poor predictability of the rate. This criterion is caused by the fact that blockchain technology is currently one of the most progressive and few specialists are familiar with it, so it is impossible to predict the koin rate with a high degree of probability.
3. Lack of legal status in many countries. To date, categorise countries according to their attitude to blockchain as follows:

• Neutral – rather ignore such a phenomenon as cryptocurrency, completely abandoning its centralised regulation;
• Loyal – have recognised certain types of cryptocurrencies as a real means of payment, which allows for legal transactions using them without the involvement of intermediaries and, consequently, the commissions they charge;
• Prohibiting. In these countries, blockchain is partially or completely banned, as well as any actions with it. For the player, this means having to use virtual exchanges to legalise their income.