What You Need to Know About Bitcoin Gambling
Since its inception, Bitcoin has constantly proven its usefulness and adaptability to many different industries. It is also credited with the creation of new jobs and an entire ecosystem dedicated to solving problems in a new way through blockchain technology. While most applications of Bitcoin revolve around financial systems, several unconventional industries have applied the technology. These industries include art, real estate, and the shipping industry. At this rate of adoption, it comes as no surprise that Bitcoin is also taking the gambling world by storm. In fact, the gambling industry was one of the earliest adopters of digital currency, with some Bitcoin casinos dating back to 2014.
Traditional gambling systems have existed for a long time, and while they have operated effectively through the years, several aspects of their operations remain inefficient. For one thing, casinos are notorious for their money retention tricks, ensuring that players don’t beat the house. There is also an issue of transparency; players don’t know much about the casino’s dealings, except what goes on at the tables. Location barriers have also stopped foreign players from gambling at the casinos they want.
Online gambling was created to address some of these issues, but many of the original problems persisted. Bitcoin gambling allows players to deposit, wager, and withdraw funds using cryptocurrency such as Bitcoin, and more recently, altcoins like Litecoin, Ethereum, and Monero.
For both new and seasoned gamblers, this provides a way to trade without the currency restraints that accompany fiat money and allows them to take advantage of the bonuses in different casinos regardless of location. Powered by blockchain technology, Bitcoin also brings a level of transparency to gambling, that traditional systems don’t.
What are Bitcoin Casinos?
Bitcoin casinos are online casinos that accept deposits in the form of cryptocurrency. Usually, the casinos decide on a few digital currencies which users can play various games with. Bitcoin casinos are similar to regular online casinos in that they offer the same gaming options. A typical Bitcoin casino like FortuneJack lists popular Bitcoin games like Dice, Poker, Roulette, Blackjack, Slots, and even sports betting. In addition to a large selection of games, Bitcoin casinos offer players welcome bonuses containing free plays, or a certain percentage of match bonuses, along with the opportunity to play no-deposit games.
Such casinos often have Bitcoin faucets that allow players to complete small tasks in exchange for cryptocurrency which they can wager. This ensures that new players, who have no digital currency yet, are not excluded. Although the term ‘Bitcoin casino’ may insinuate the absence of fiat currency in all transactions, this is not always the case; some of them accept fiat currency along with digital currency. This varies with each casino and for a less restricted experience, it may be better to find one that offers both options. While cryptocurrency payment has its many advantages, so does fiat, especially if players receive rewards from credit card or e-wallet providers for spending money.
How Do Bitcoin Casinos work?
Most Bitcoin casinos operate just like their regular online counterparts in many ways. However, apart from payment methods, they have different registration protocols. In traditional casinos, users are expected to relay sensitive information for verification purposes. Often, a new player is required to submit a full name, email address, phone number, photo, or details pertaining to a government-issued ID.
Hackers can gain access to such information and use it illegally. For this reason, players may want to remain anonymous. Unfortunately, traditional casinos are subject to many laws that require them to verify every player. Such verification is also a protective measure to prevent fraud and make money laundering more difficult.
Bitcoin casinos are not governed by the same laws and can easily trace transactions using blockchain technology. As a result, they can afford to allow players to remain anonymous (using pseudonyms). Some of these types of casinos go as far as allowing users the option to register, while some have no registration process to begin with. Players open a new account which has a wallet to store their cryptocurrency. From this wallet, they place bets and all proceeds go back into the wallet until it’s time for the player to make a withdrawal.
When the withdrawal process is initiated, players are required to provide a Bitcoin wallet address where their funds can be sent. For most reliable BTC casinos, funds are transferred immediately, and take 10 minutes to be confirmed, like all other Bitcoin transactions. To keep players returning, most casinos have withdrawal limits to ensure that players cannot withdraw all their funds all at once. This also varies by the casino.
Why are Bitcoin Casinos Gaining Popularity?
Bitcoin has won over the casinos due to its anonymity, transparency, ease-of-use, and lack of strict regulations. For the same reason, cryptocurrency has been associated with illicit transactions in the past. Now, it is helping Bitcoin casinos avoid the strict laws that govern traditional gambling. Players are also avoiding these laws, especially regarding taxes, since proceeds from cryptocurrency gambling are not taxable unless legally declared.
Bitcoin casinos also offer many benefits to users, such as mega-jackpots in which players can win as much as 300 BTC. In addition, several Bitcoin casinos do not charge transaction fees and allow users to play as many games as they want for free. Many such casinos are also provably fair, and can show that a user has not been cheated by the House.
Are Bitcoin Casinos Legal?
The legal nature of Bitcoin casinos is nuanced by the absence of a central figure in control of Bitcoin, the difference in national laws, and the issue with cryptocurrency regulation on a larger scale. As a result, these casinos exist in a grey area in which some laws apply to them, while most do not.
Since there are no general laws governing their operations, some countries have implemented their own laws. For example, in Australia, it is illegal to wager using cryptocurrency – especially Bitcoin and Ethereum. In the UK, all Bitcoin casinos must be licensed by the UK Gambling Commission (UKGC), the regulatory body responsible for all gambling affairs in the region. There is no Federal law against gambling online, but there is some regulation on the location of Bitcoin casinos. Bitcoin gambling sites are established in jurisdictions where it is legal, then offer their services to US residents from there.
What Are The Risks of Using Cryptocurrency?
The greatest risk that users and operators face when dealing with cryptocurrency is the lack of regulation. A lack of regulation means that malicious actors can get away with many activities that hurt the casinos and their players, such as theft and cheating. This is why casinos must be completely transparent with their activities and have standards in place to prevent bad actors.
There’s also nothing to stop casinos from disappearing with player funds since most sites and players are anonymous. The cryptocurrency ecosystem has seen such occurrences in the past, from Ponzi schemes to Pump and Dumps, ICO scams and other fraudulent activity.
Cryptocurrency is also highly volatile, and the rise and fall in the value of BTC or other coins can lead to huge reductions in the value of earnings, wagers, and funds held in the casino wallet.
What Does the Future Look Like for Bitcoin Casinos and Gambling?
Bitcoin offers several regulatory, profitability, and performance advantages over traditional gambling. Just as digital currencies with improved applications emerged shortly after Bitcoin to optimize payments through blockchain, new currencies may emerge to make gambling safer and more efficient. Despite rapid ongoing development, the industry is still in its infancy. Future regulations may discredit whatever predictions are made now, so it will be interesting to watch these events unfold.