Cryptocurrency and gambling are two things that perfectly complement each other in this digital era. If there is one industry in the world where trust is the most important aspect, it is gambling. And at the very core of cryptocurrency, there is trust, which was previously lacking or breached multiple times by people and traditional financial entities.
Consider your bank, for instance. If you want to send money to another account holder in the same bank, you initiate a transfer and trust the institution to credit the particular account with the amount you sent.
However, with cryptocurrency, you don’t have to put your trust in any entity. Think about what happens when you want to send money to an account at a different bank. This is where a second firm comes in and which you need to trust. The bank needs to trust too. Do you recall all those documents you provided when you first opened your bank account? That’s part of the bank ensuring it could confide in you.
Now, there are some issues with such transactions, and they are dealt with by cryptocurrency. First and foremost, banks have betrayed the trust of their clientele before and it makes sense that they will do as such again. The 2007-08 financial crisis was a very genuine case of banks abusing the trust their customers had in them and it’s the customers that felt the pinch.
The other issue arises when the bank itself doesn’t trust you for whatever reason. Perhaps you lack the correct documentation needed to open an account in the first place, and there are billions of people around the globe in this situation.
Cryptocurrency creates trust between distinct network participants utilizing open-source, fully-verifiable code. This code ensures that only transactions that uphold the network rules are acknowledged. So if the sender and recipient trust the code, there is no need for mutual trust between themselves. Extraordinary!
Eliminating Trust with Programmable Money
The fact that everything involving cryptocurrency is digital means it can be programmed to behave in a particular manner dependent on various defined inputs. Programmable money in this regard is often referred to as a smart contract. Platforms such as Ethereum, NEO, and EOS, are all proponents of smart cards.
Smart contracts can be used to implement certain outcomes. For instance, in a dice throwing game, you can program the smart contract to pay the player if an even number is rolled and pay the casino if the outcome is an odd number. This is a decent scenario of how smart contracts can remove the trust a player needs to have in an online casino when using cryptocurrency. On the off chance that our dice game was fully utilizing open-source code, the player would be able to review the code to check whether or not the game was really designed to pay them whenever their wagers won.
Provably Fair Gambling
Provably Fair technology is unique to cryptocurrency gambling. Basically, the concept adds to the transparency of cryptocurrency online casinos by verifying that bet outcomes were fair and correct. This system is based on the fact that cryptocurrencies such as bitcoin use a cryptographic algorithm using hash functions, which for practical reasons, are very hard to decode. Ideally, hashing every transaction that takes place in an online casino ensures that each game has its own algorithm for checking its individual fairness.
This is how the Provably Fair systems work: the online casino creates a seed number for a bet, which is then hashed and sent to the player. The gambler adds a seed and the bet pays out. After the bet is complete, the player receives the seed used in the bet. If it matches the bet, then it’s verified. No human interference whatsoever! And the casino tried to alter the bet in any manner, the hash function would change and the bet wouldn’t be verified. For the first time in the history of gambling, a bet payout can be verified by a player in real time.
Bitcoin casino operators spend incredible sums of money every year getting their games audited. Provably fair games could make this a relic of past times. With the use of blockchain and smart contract technology, the authenticity of a game can be scrutinized in minutes, anytime. There is absolutely no need for a team of auditors to dig profoundly into the operations and finances of a gaming company. Furthermore, the very blockchain that the casino is built upon keeps the record of every transaction, allowing for future inspection if needed.
Democratization of Online Gambling
Another advantage of cryptocurrencies is that it eliminates the need to seek permission from a central organization to use them. This could dramatically affect parts of the world that have banned online gambling.
Those coming from jurisdictions that are antagonistic to the pastime can sidestep whatever controls that have been set up by the banks to prevent people from gambling. This is potentially liberating for populations living under such stringent legislation.
Swift Cheap Transfers
Last but certainly not least, the speed with which a transaction can be processed is a far-reaching quality of cryptocurrency. For those who are not familiar with how bank transactions work, you could be thinking depositing at your favourite website takes a matter of seconds. So how can cryptocurrency be faster than that?
Well, the amount you deposit to your online casino that shows up on your screen in less than a second has not really arrived in the actual sense. The truth is, banks take quite some time to update their ledgers. What actually happens when a deposit appears to happen in a split second is yet more trust.
Your online casino trusts that your bank has surely initiated the transfer that you requested and credits you the cash to bet with until your actual money reflects. As a matter of fact, it can a few business days for the funds to truly move between accounts. The same principle applies to withdrawals as well.
The trust involved between those transactions does not come cheap. Banks charge substantial amounts to process transactions and the casinos suffer the brunt of these fees. As you would expect, they pass this cost on to the player with scanty bonuses and reduced return to player (RTP) rates.
On the contrary, when cryptocurrency is used as a payment method, it requires very little to no transaction fee. Consequently, cryptocurrency casinos pay a lot less in overheads (keep in mind they don’t need comprehensive auditing either) and the accrued savings can be passed on to the players in the form of no-deposit bonuses, welcome bonuses, loyalty rewards, and juicier promos.
Considering the exceptional attributes of online gambling, it’s no surprise that it is an industry that cryptocurrencies are currently disrupting. Cryptocurrency avoids various loopholes and suits the online casino industry far better than standard currencies.
But, this is just the start. Blockchain and smart contracts are bound to take over many other sectors and replace trust in error-prone humans with solid, reliable code. It seems obvious that ordinary currencies are not going anywhere, but cryptocurrency is truly a product of the digital age. It is only a matter of time before this revolutionary innovation impacts many more corners of our lives.