The Ultimate Crypto Casino Guide 2018
Introduction to Bitcoin Casino Gambling
Consumer appetite for convenience, speed and cost-effectiveness has facilitated exponential growth within the virtual economy. The economic benefits of such services include the ability to transfer funds internationally with ease – away from often expensive banking fees, the opportunity for small online vendors to enable payments without incurring high merchant charges, and the capacity to protect personal wealth against the threats of hyper-inflation. However, what opportunities has this created for the estimated $47 billion online gambling industry? Let’s take a closer look into the emerging Bitcoin Casino niche.
What is Bitcoin?
In its most basic form, digital currency is a “digital representation of value that functions as a medium of exchange, a unit of account, and/or a store of value”. The original, and still the ‘de-facto’ de-centralized digital currency is Bitcoin, which at the time of writing has a total market capitalization of 60% of the total digital currency market share. Cryptocurrency transactions that are de-centralized rely on peer-to-peer blockchain technology, and as such, are not backed or controlled by any single authority or central bank, nor are they governed by any nation state. Subsequently, in the era of digitalization, the traditional concept of fiat money is being challenged.
Bitcoin vs Traditional Payment Methods
The most common payment method when engaging with online casinos is in the form of a debit or credit card. Although this affords the player with the convenience of instant deposits, it also carries certain flaws that Bitcoin is able to alleviate. Firstly, the user must provide sensitive financial data which is then consequently stored by the operator. This is not required when depositing with Bitcoin as the player can transfer funds directly to the crypto casino from their external digital wallet. Furthermore, when it comes to withdrawing winnings, traditional payment cards often require days before the funds are returned to the player’s bank, potentially even longer if opting for a direct bank wire. Due to the speed that Bitcoin’s cryptographic framework can process transactions, players are often paid out significantly faster.
Moreover, as traditional payment methods require a third-party intermediary to validate a movement of funds, the casino operator will often have to incur high merchant fees in the region of 4-9%, which consequently may be passed on to the player. Without the operator having to worry about fraudulent deposits or credit card chargebacks when using Bitcoin, players can benefit from greater incentives such as bonuses and free spins at a Bitcoin Casino.
Privacy and Access
Casinos facilitating Bitcoin deposits also offer new layers of transparency that are not present with conventional casinos. This is because of the Blockchain technology, which effectively acts as a public accounting ledger by allowing anyone to view historical transactions. The value that this adds to the player is that they can check the crypto casino operator’s public Bitcoin Casino address to ensure that they hold sufficient funds to honour potentially large wins, rather than relying on trust. The Blockchain can also help verify a missing deposit or the status of a pending withdraw, as once a transaction has been initiated by the online casino, it is available to view on the public ledger as quickly as 10 minutes. There may also be instances where players prefer an element of privacy when using online casinos, potentially related to personal, legal or taxation consequences. As Bitcoin addresses offer users pseudonymity – effectively avoiding any connection between the address and the players identity, Bitcoin casino deposits and withdrawals can remain private, rather than appearing on a user’s bank statement. Moreover, in certain jurisdictions where online gambling is prohibited, players are free from regulatory burden and banking controls. This includes the requirement to supply countless documentation such as sensitive identity cards and taxation forms. Furthermore, with Know-Your-Customer controls becoming ever more stringent, such as requiring a player to get documents notarized by a local official, crypto casino players can relax with the knowledge that they can withdraw their winnings burden-free.
Financial technology has evolved tremendously since the turn of the century, benefiting both consumers and businesses alike. Long gone are the days of expensive, slow and time-consuming barriers when attempting to spend and receive funds online. The online casino industry is not immune to these benefits, thanks partly to the growth of cryptocurrencies such as Bitcoin. Stringent regulatory burdens are now a thing of the past, with crypto casino players able to avoid long delays when both depositing and withdrawing funds, as well as having to pay unnecessary transaction fees. Bitcoin has also allowed security and privacy to improve, by removing the need for players to provide highly sensitive data, including credit card details and financial records. This has allowed online casinos to spend less time and money on regulation, and instead focus their resources on the things that matter – the player experience. Larger bonuses, more frequent free spins and higher pay-out ratios are just some of the many benefits that this has afforded. So what are you waiting for? Experience the joys of Bitcoin gambling today!
Introduction to Smart Contract Gambling
The online casino industry has a fundamental requirement – trust. How do players know that their funds are safe, and how do they know that the games they play are fair? Such reputational factors play a big part in a casino’s ability to earn credibility, especially for those located in jurisdictions where regulation is weak or non-existent. Nevertheless, the cryptographic revolution has created an opportunity for the industry to completely alleviate these concerns, by utilizing the features that blockchain smart contract gambling can offer. This article will begin with an easy to understand explanation of what a smart contract actually is, followed by a discussion on the enhanced transparency, flexibility and security that this will allow the online casino industry to offer its players.
What is a Smart Contract?
In a nutshell, smart contracts are the building blocks that allow users to create a pre-defined agreement without requiring a third party to validate the transaction they are attempting to initiate. For example, instead of drafting a real estate document to outline the terms of a rental agreement, a smart contract allows individuals to achieve this aim using cryptographic code. Bitcoin’s framework is limited in the sense that it can only apply these mathematical laws in currency exchange, whereby a blockchain such as Ethereum offers unlimited opportunities. The unique code that users submit to the Ethereum blockchain cannot be altered, and they are self-executed based upon pre-defined rules. Furthermore, everything is publicly available to view on the blockchain, therefore providing stakeholders with full transparency. Moreover, to protect privacy, smart contracts are not linked to a user’s identity, rather parties are identified by set of alphanumeric characters. Still confused? Don’t worry, the following example will illustrate just how a smart contract could be used in everyday life.
Every year, thousands of airline passengers do not claim compensation for delayed or cancelled flights. Why? Well, firstly they are probably not aware that they are entitled to claim, or if they are, they must complete countless amounts of paperwork to get what they are owed. A pre-defined Ethereum smart contract could execute automatic refunds to affected customers by extracting and analysing external flight data based on publically available information. No middleman, no third party, just a trust-less, cryptographic framework that offers complete transparency.
Smart Contracts in the Online Casino Industry
So how can you take full advantage of the many benefits smart contract gambling has to offer?
Blockchain technology offers cryptographic assurances that the online operator are playing by the rules, in other words, providing ‘provably fairness’. For example, imagine spending your hard earned money on an online slot game but not knowing whether or not the casino was trying to cheat you, and having no tools to independently verify this for yourself? Smart contracts gambling could transparently provide stakeholders with the means to verify game-play algorithms, rather than allow casinos to withhold this data internally. Access to such records, or even knowing that they exist, offers players the level of trust required.
Otherwise known as the betting exchange, internet capabilities currently allow users to bet against one another. For example, party A believes that Calypso Moon will win the Grand National horse race, however party B thinks it will lose. An online betting exchange acts as an intermediary by linking the two players together, however they often charge extortionate fees in the process, as well as operating through vast regulatory barriers. Smart contract gambling could completely alleviate the need for a third party, as players could gamble peer-to-peer, finding one another through pre-defined rules. Not only would the associated fees be next to nothing, but settlement would be near instant.
Due to the nature of expensive transaction fees when attempting to deposit and withdraw funds with an online casino, those in society who want to enjoy the excitement of gambling with ultra-low stakes are effectively eliminated from the market. The fees that smart contract gambling attract are significantly lower in comparison, and as such, allow players to gamble small amounts without being penalized. By allowing players to take full control of how much they want to wager, they are also not restricted by maximum stake sizes either.
Lower House Edge
Traditional casinos, in order to ensure they are sustainable, have a pre-defined house edge on the games they offer. For example, on a standard European roulette table, the odds of successfully predicting the correct number is 37/1. However, the standard pay-out is usually only 36/1, thus, the casino have a 2.7% edge on the player. A smart contract casino has the ability to offer a substantially lower house edge, insofar that the required resources to operate are far below that of a conventional fiat casino. This offers the player a far greater incentive to gamble online, as they have a greater chance of return.
Anonymous Gambling with Cryptocurrencies
In the years before the cryptocurrency phenomenon, anonymous gambling was an impossibility. From visiting the local casino to gambling online, players would have to identify themselves in a number of ways. Firstly, access to a casino is a face-to-face activity. This includes registering as a member, engaging with table dealers and being monitored by CCTV recordings. Next, in the age of online casinos and sportsbooks, new customers must verify themselves by providing countless documents such as a passport, utility bill, and copies of debit/credit cards. Moreover, deposits and withdrawals appear on a customer’s bank statement, something they may wish to avoid. Nevertheless, the introduction of cryptocurrency has made anonymous gambling a real possibility for those looking to gamble discretely, privately and most importantly, anonymously.
The first step to achieve anonymous gambling is to register an account with an operator that only accepts cryptocurrency as a payment method. The reason for this is that users do not need to supply any personal details when they create a cryptocurrency address, such as Bitcoin or Ethereum. Therefore, when registering, players need only provide their public key, thus keeping the gambling experience anonymous. Once players have an account, they can securely deposit funds by transferring their chosen currency from their personal wallet, ensuring that they enter the online casinos public address as the receiver. At this stage, the only details that the crypto casino have is the player’s virtual address, thus avoiding the need to supply sensitive information such as your name, residential address, and date of birth or debit/credit card numbers.
Players are Borderless
One of the most beneficial features of anonymous gambling is that it allows users to gamble in jurisdictions where it might be prohibited. To illustrate this restrictiveness, citizens in Thailand and Vietnam must travel to neighbouring Cambodia to access gambling facilities! Imagine having to waste money on transport, hotels and foreign exchange, just to be able to spend your own money how you choose to? With the use of an anonymous browser such as Tor, individuals can access gambling websites anonymously, without fear of being monitored. Furthermore, certain nations such as the USA require its citizen to pay high tax contributions on gambling winnings. Anonymous gambling with cryptocurrency protects the player from having their withdrawals monitored by governmental agencies, thus allowing them to keep the full proportion of their funds.
The anonymous gambling experience also extends to wagering. For example, rather than having to sit at a blackjack table in a busy land-based casino, users can play traditional casino games in the comfort of their own home, without having to reveal who they are or where they are from. This is also beneficial for those located in areas where casinos are either non-existent, or limited in the amount of games they offer. Online casinos that facilitate anonymous cryptocurrency gambling offer a significant range of games, from blackjack and roulette, slots, and even peer-to-peer games where players can wager against one another.
Ever wondered why it can take days, sometimes weeks to receive your winnings? Due to the various anti-money laundering and fraud regulations that online casinos must adhere to, risk departments must perform robust identity checks. This is to ensure that the casino remains a safe place to gamble, however for the vast majority of players who are legitimate, this can result in long delays. It is not uncommon for traditional online casinos to request notarized passports or high-resolution images with the player holding their documents against their face, which can result in severe frustration. Nevertheless, these regulatory burdens are no longer required as cryptocurrency casinos do not need to apply the same ‘Know Your Customer’ controls, as cryptocurrency does not fall within the remit of gambling legislation. Therefore, anonymous gambling allows players to receive their withdrawals with the utmost speed, all thanks to the efficiency of the blockchain mechanism.
Traditional online casinos offering fiat-only options to their customers will soon become obsolete. The reason for that? Well, as this article has demonstrated, the complete end-to-end gambling experience has been significantly enhanced by the creation and implementation of cryptocurrency. This begins with the registration process, whereby new players need only supply their email address (for password recovery and contact purposes), rather than the standard requirements of name, address, date of birth, and anything else that that particular casino requires. Next, when it comes to depositing funds in to your newly created account, long gone are the days of needing to provide sensitive payment details such as a debit or credit card. Furthermore, not long after registration, traditional casinos will most likely request personal documents to avoid account restrictions, such as a passport or bank statement. Anonymous gambling using cryptocurrency completely alleviates this requirement, keeping your information safe from potential breaches of security. Finally, not only are deposits safe and secure, but withdrawal times are seamless, as the crypto casino will not need to waste valuable resources on regulatory identification checks, which are usually a requirement prior to funds being released.