Pros and cons of cryptocurrency in gambling
Categories: News | Published by: admin 06/02/2018
More and more operators prefer crypto payments refusing to accept standard fiat currencies. However, the increased interest in digital currency causes various types of questions. In this article, Bitgambler experts will examine in detail the concept of cryptocurrency in gambling, what are the advantages and disadvantages of introducing modern technology into the gambling business.
WHAT IS CRYPTOCURRENCY: SHORT AND SIMPLE
Cryptocurrency is virtual money, which, unlike fiat currency, does not have a physical expression. It all started on October 31, 2008, when an article about the prospects of using electronic money “Bitcoin: A Peer-to-Peer Electronic Cash System” was published at one of the IT-forums. The name of the most popular modern cryptocurrency “bitcoin” appeared in it for the first time.
On January 9, 2009, the first version of the bitcoin wallet was released. Crypto money was created as a quick and easy way of mutual settlements between people, completely anonymous, not subject to government control and with minimal fees. Also it is worth mentioning about the preservation of the complete transparency of transactions.
PROS OF CRYPTOCURRENCIES IN GAMBLING
Today, in some online casinos, cryptocurrency successfully replaces the standard payment methods, due to its indisputable advantages.
Complete anonymity. The blockchain technology guarantees users anonymity performing cryptocurrency transactions. Information that is available now is highlighting the number of wallets that are specified for transferring or receiving electronic funds. After registering, wallet owners do not provide identification data and act under a pseudonym, which ensures complete anonymity.
Payment rate. All cryptocurrency payments are made bypassing banks and any intermediary interventions. Since all transactions are carried out directly between the user and the operator, the process of depositing funds takes a minimum of time.
No double conversion. Bets that are made in digital currency exclude double conversion, which significantly reduces the spendings of casino players.
Zero commission. Any crypto transactions are made without the intervention of banks, which eliminates the commission costs for users and has a positive effect on their finances.
Accessible payment history. Records of all remittances made are stored in the publicly accessible blockchain database. Therefore, in the event of ambiguous situations, it will be possible to check the disputed information.
Full security of the wallet. The user’s wallet is securely protected due to the complex identification procedure and password. Even if hackers succeed in accessing the database of the gambling platform, they will have access only to the administration tools.
Lack of geographical restrictions. Players can bet even in countries where gambling is prohibited.
Despite the undeniable advantages of using cryptocurrency, the technology has several disadvantages.
CONS OF CRYPTOCURRENCY IN GAMING BUSINESS
High volatility of crypto prices. The rate of cryptocurrency depends on various factors, which indicates the unpredictability of the digital currency. Therefore, you need to be prepared to fluctuations in the value of electronic money.
There is risk to lose money. In case of loss of a special password to the wallet, access to crypto-money will not be possible to recover.
Uncertain legal status. The authorities of many countries are very careful with virtual money. If in some states, the issue of using cryptocurrency is at the stage of searching for a compromise, in others, it is considered a legal violation.
STATISTICS ON BITCOIN CASINOS FOR 2017
The use of bitcoins in casinos added to the gamers confidence in the confidentiality of their data, accelerated the process of withdrawing money, paying jackpots and prize money. Online gambling is a huge industry, the volume of which amounted to 45.86 billion dollars in 2016 and so far bitcoin has captured only a small part of this market. Nevertheless, the demand for crypto-money in online casinos is growing every year.
According to the Bitcoin Strip, more than 24.5 billion crypto bets have been made in the past two years. In 2017, the popularity of Bitcoin casinos only increased. According to statistics, in 60 crypto casinos, people make 337 bets per second and bet 3 BTC per minute. Moreover, since 2014, about 3.7 million BTC which amounted to 4.5 billion US dollars have been bet.
MALTA – BLOCKCHAIN ISLAND
Blockchains and Distributed Ledger are breakthrough technological innovations that can change the financial services sector in Malta. After the government announced its decision to assign the status of a Blockchain-Island to Malta, a sharp increase in interest in ICO, virtual currencies in general, was noticed. Like all innovations, the DLT and cryptocurrency bring a number of challenges and opportunities for all stakeholders, be they regulators, players or investors.
The MFSA (Malta Financial Services Authority) is a government agency whose task is to regulate the credit and financial area.
The two main problems faced by MFSA are:
- the risk of fraud in ICO;
- use of crypto assets for money laundering.
The blockchain technology has allowed us to develop a number of tools that will help prevent and eliminate the following risks through the monitoring of transactions.
As for the future prospects of the blockchain, news of permission to open deposits and make payments in Bitcoins is appearing more often as well as the EU financial contributions allocated to the improvement and development of the technology.
A striking example is one of the largest investment banks in the world, Goldman Sachs, which introduced cryptocurrency into a number of its digital products. Thus, in 2018, according to the leading publication of The New York Times, Goldman Sachs announced the launch of a special service for trading Bitcoin futures. The exact date of the launch of the innovative solution is not known yet, but the members of the board of the bank have already approved such an initiative.
Therefore, it remains only to wait when the service enters the market. However, it is not a fact that all cryptocurrencies will be able to “live” until the stage of their full adoption.