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Digital and virtual currencies are fast becoming recognised in the UK as a convenient and money-saving method to pay for online gambling. Cryptocurrency has been a word thrown around for over a decade now but we are starting to see some stability in the way the UK public is willing to spend this digital currency. Bitcoin is, of course, the major player here and most casinos that accept cryptocurrency will have Bitcoin as the number one option. Ethereum is another popular option that you will hear much more of over the coming years.
The advantages of using a digital currency is a no-brainer for online players with faster transactions, minimal and sometimes zero fees, and not to mention that these cryptocurrencies are completely private with no personal banking details required. Online casinos are often at the forefront of technology and so it comes as no surprise to see many sites integrating cryptocurrencies into their banking pages.
Current Situation
The mass appeal of cryptocurrency revolves around the one main reason it was invented for in the first place. It’s a deregulated currency and so there are no third parties in place to take fees or control the money. Everything is controlled by the person who owns it. This means that initially there were little to no laws in place and for a while, many governments were not convinced that the age of cryptocurrency was ever going to take hold. However, it looks like they will now have to play catchup as more and more people start to use it in their day to day lives.
Currently, many online casino players are taking advantage of the free use of cryptocurrencies by using it in areas of the world where gambling is banned. It is a grey area but due to the deregulated status of the currency, many casinos are not tied down to the usual bank restrictions and rules that come with sending typical fiat currency to and from the site. In other words, the casinos are not having to absorb transaction fees and this becomes a win-win for the casino and player.
At the moment, there is only a handful of countries who have made moves to regulate cryptocurrency. The UK, Italy, Greece, Belgium, Poland and the Netherlands have all taken steps to govern this new currency used at gambling sites. For example, the laws in the UK state that all crypto casino sites need to adhere to the current online gambling laws. This means that the all-important privacy of using Bitcoin is slightly lost due to the Know Your Customer (KYC) procedures.
Less-popular crypto options such as Zcash and Monero do give users added privacy but this obviously starts to impede on law enforcement and money laundering investigations. As more countries start to get on board, an important phase for cryptocurrency will come as other governments around the world try to remove the one key feature that makes this type of currency so attractive to use in the first place.
Advantages and Disadvantages of Gambling with Cryptocurrencies
We have already highlighted some of the features that online casino players are attracted to when using these new digital and virtual currencies, but let us give you the full rundown of advantages and disadvantages:
Advantages
- Ultimate privacy for both casinos and players with no third-party interference.
- Safe and secure with no personal information or bank details required.
- Instant deposit and withdrawal transactions.
- Little to no transaction fees in place.
- Bitcoin is still deregulated in many countries so it is not subject to taxation.
- Cryptocurrency can often provide you with better casino bonuses.
Disadvantages
- Bitcoin casinos do not require a license issued by an official gambling jurisdiction so there is room for unlawful gaming sites.
- In comparison to standard banking methods, cryptocurrency options are still in the minority.
- Bitcoin is still somewhat volatile and its value can quickly move for or against you.
Regulations Overview
Governments are starting to crack down on crypto gambling and many of the top gambling countries have already started to put in place the appropriate laws and regulations. It’s the government’s job to keep track of the financial activities of their citizens, so it’s more a matter of when they will put the laws in place rather than if they will put the laws in place.
The deregulated currency issue does bring many benefits for casino players and the casinos themselves, but there is a huge grey area in which rogue casinos and crypto fraudsters can then freely operate. Ultimately, there needs to be balance of keeping the privacy of cryptocurrencies alive but also keeping casino players safe from losing their money to unlawful gaming sites.
The growing confidence in crypto does look positive and the steps made by the UK and other European countries go to show that crypto is here to stay. As with all technology, it is forever being upgraded and developed into something bigger and better. The arrival of on-chain crypto technology has given digital currencies a decentralised network and this has further increased the security and privacy of transactions.
Therefore, this on-chain technology makes it even harder for governments to crack down on sites as there is no specific IP address to block, unlike off-chain technology used in conjunction with Bitcoin and Bitcoin-accepted casinos. One thing is for sure, Crypto technology and governmental laws look set to be locked in a battle to find common ground over the next few years.
Popular Cryptocurrencies for Gambling
Bitcoin is without a doubt the most popular of the digital currencies but there are new and improved cryptocurrencies being developed every year. Many online casinos and affiliate gaming sites are aware of this shifting trend. Ethereum is on everyone’s radar at the moment and so we’ll briefly explain these two frontrunners as we look to the future of crypto gambling.
Bitcoin
Bitcoin was the first and is still the most popular of all cryptocurrency with it taking up almost 50% of all crypto transactions in the world. Introduced in 2009, the trailblazing currency quickly altered the economic environment forever. Naturally, Bitcoin was also the first cryptocurrency that the online casinos looked to and you are more likely to see a Bitcoin casino than any other in the current iGaming landscape at the moment. Although, this could well change very soon as the technology behind Ethereum holds something a lot more interesting to casino players.
Ethereum
Ethereum is a second-generation cryptocurrency that builds on the foundation of the Bitcoin technology. It is more of an application platform for developers than opposed to Bitcoin’s peer to peer digital payment system. Ethereum has managed to open the door for worldwide decentralised applications. Essentially, it has taken the blockchain technology of Bitcoin and opened up many new corridors to how we can all benefit from using cryptocurrency. Take the Ethereum-powered Edgeless and Funfair casinos for example. These are 0% house edge casinos that take honest gaming to a brand-new level by taking advantage of Ethereum technology.
Bitcoin Casinos
Casinos in Vegas, Macau and gaming sites across the internet make their money from what is known as the house edge. It’s a mathematical calculation that ensures the casino will profit in the long run, but there is a change in motion, and this has come about through the use of Ethereum and 0% house edge casinos. Let us explain frontrunner Edgeless Casino in more detail and outline why they could be the future of online gaming.
Edgeless Casino is one of the first truly transparent online casinos in the world with the all-important 0% house edge. For the last 20+ years, casino players have had to simply trust that the house edge of an online casino is what it says it is. However, the introduction of Ethereum-based casinos like Edgeless means that you can now view all payout ratios, transactions and bets clearly via what are known as smart contracts.
Smart contracts are at the core of Ethereum and these are, in simple terms, blockchains full of freely available data that shows every detail within a transaction. Every detail, in this case, would be the bet transactions, but more importantly the random mechanism and payout ratio within each casino game as well. Any wrongdoing by a casino would be spotted immediately and reported.
The other key to using these smart contracts is that your winnings are automatically transferred to your account. There would be no third party stopping the instant transfer from taking place and this is what players want. No middle party interfering with extra fees and withdrawals taking multiple days to process. It’s you and the casino and your digital money.
Summary
The future of online casinos and cryptocurrency looks set to move forward together as the technology continues to improve. At the core of crypto gambling, we have two main features which are privacy and transparency. For years, players have questioned the legitimacy of online casinos and games and we have had to simply put our trust in these big casino businesses. Nowadays, with the introduction of Ethereum-powered casinos and smart contracts, players can hold a lot more faith in online gaming and the lack of personal details required is obviously a lot safer all round as well.
As with all technology, it soon becomes outdated and so perhaps Ethereum might not be the final answer but it is certainly asking the right questions. The youth of today are spending more and more time online and digital currency is the obvious path. The 0% house edge is a monumental push towards an open and honest casino and we’re excited to see what the future holds for crypto gambling. Bitcoin started it all. Ethereum has pushed the boundaries. This is only the beginning and we are sure that there are a lot more exciting things to come in the crypto gambling world.
