Online gambling can be profitable. Some games played online are fun, and people have made careers in the industry. However, not every country sees the fun or anything good at gambling. In countries like South Korea, gambling attracts a 3-year jail term. But thanks to Bitcoin, life is changing for everyone who wants to gamble online.
Online Casinos Limitations
Traditionally, online casinos are registered companies with licenses. An online casino serving the UK must be registered in the UK and have a permit to serve UK citizens. Such a casino also works together with local banks to ensure players transfer their funds easily. Where online gambling is illegal, casinos would risk lawsuits to allow members from the particular countries to play.
Besides government imposed laws, traditional online casinos have some limitations and flaws:
– Some casinos use biased number generating algorithms to ensure the casino win most of the time
– Some delay payments intentionally or unintentionally
– Go rogue and close down with gamblers’ money
– Ban players for trivial reasons
– Have high minimum payouts and few accepted payment methods
Bitcoin and Casinos
With the advent of Bitcoin in 2009 came a technology known as the blockchain. Designed like a ledger, the blockchain is a digitized public entity where data and records can be verified and recorded permanently. The blockchain also allows cryptocurrency payments, sometimes even if the traders are anonymous. This way, you can gamble easily irrespective of your country of origin.
Additionally, the Bitcoin technology introduced smart contracts. Technically, the idea originated from Ethereum, Bitcoin’s biggest rival. Smart contacts are executable computer commands that ensure casino players gamble in a trustless, fair and conflict-free manner. By combining blocks in blockchain and smart contracts, modern bitcoin casinos offer transparency in gaming never experienced before. Read more here.
Benefits of Bitcoin Technology to Casinos
More Players Globally
Blockchain and use of Bitcoins allow casinos to attract players worldwide. True, the casino may need registration to operate legally, but governments don’t control bitcoin. Bitcoin and other coins are decentralized, owned by anyone irrespective of where they live. Cryptocurrency payments are also boundless, and owners can make payments anywhere around the globe. This means that a casino registered in Russia could attract players from any other country in the world with ease.
Enhance Trust with Players
Most people don’t trust casinos. With dozens of casinos shutting down every month, it can be difficult to build trust with customers. An estimated 1.4 million fake casinos will be opened in the month of April 2018 and the months after.
Fortunately, Bitcoin and smart contracts can help improve the relationship between a casino and their players. Players’ gambling funds and the casino’s prizes are secured by smart contracts. The Bitcoin protocol keeps every data transparent and verifiable. Good Bitcoin casinos use provably fair methods and make the algorithms used to determine winners open for everyone to verify. This way, there is zero success of a player feeling duped.
Bitcoin and smart contracts eliminate the need for people to make records or verify payments. It eliminates middlemen and possibility of interference with the gambling process in any way.
Automated; No Chargeback Payments
Bitcoin payments cannot be reversed. Compared to credit card payments, PayPal payments and other online payment methods, Bitcoin may be one of the best ways to accept payments from players. After setting up a Bitcoin payment system, casinos receive payments automatically with no hassles whatsoever.
Handling chargeback issues has always been one of the drawbacks of the casino business. Too many players attempt to chargeback payments after losing in casinos. Casinos spend thousands of dollars on lawsuits and filing complaints about credit card issues.
The ICO Frenzy
Bitcoin’s bullish run may be one of the reasons why casinos accept it as a payment method, but ICO is a big reason too. Officially known as an initial coin offering, ICO is the financial model that has been helping startups raise funds for a project online. Basically, ICOs help startups crowdfund online without incurring high costs.
In a bid to market their services and benefit from the frenzy, Casinos have joined the race to hold ICOs. They offer unproven casino tokens in exchange for cryptocurrencies like Bitcoin and Ethereum. These tokens act as utility tokens and can be used by gamblers in the gaming platforms. As their demand rises, the tokens become valuable. Investors and the casinos gain from the increasing value of their tokens.
Popular Bitcoin Casino ICOs
Casino ICOs are highly successful. Between 2017 and 2018, dozens of casinos held ICOs and raised more than $200 million. Here is a list of the most popular casino ICOs.
– BitDice- Costa Rica based casino held an ICO in mid-August last year and raised close to $10 million
– Etheroll- the casino introduced smart contracts and raised an ICO in February last year. Etherolll raised more than $360,000 from the ICO
– VDice- the online gambling company offer a Dice gambling game. VDice held their ICO in June 2016 and raised more than $3 million
– Edgeless-the casino introduced a decentralized gaming platform. They held an ICO in March 2017 and raised more than $2 million
For gamblers, Bitcoin Casino technology offers even bigger benefits.
– Decentralized casinos- bitcoin payment protocol enables casinos to be managed by a network of players and owners. Networks authenticate transactions to ensure everything is transparent and to prevent fraud
– By using smart contracts, the technology increased and enhanced online gambling. Players can gamble among themselves without relying on intermediaries
– Bitcoin and related technologies enable the generation of completely random winning algorithms. The algorithms are also kept open and verifiable
– The lack of intermediaries to verify transactions lower fees and makes gambling cheap in general
– Security- decentralized bitcoin casinos store their records in a scattered manner. A hacker can only succeed if they can hack 51% of all the networks involved in data management
– Low-cost payments- making payments in the gaming ecosystem is nearly charged free where cryptocurrencies and the blockchain are used. Gamblers can make micropayments continuously conveniently without incurring high trading fees.
Because ICOs offer potentially high returns to both startups and investors, they have become a big thing in the industry. There are ICOs for nearly every industry.
The Future of Bitcoin Casinos
The online Bitcoin casino industry was one of the first industries to embrace the blockchain and Bitcoin payments. The industry has been nurturing a relationship with bitcoin and cryptocurrencies for over five years. In the next five years, more casinos are expected to integrate their services with blockchain technology. The technology will continue to revolutionize gambling in general. And as expected, the following may happen with bitcoin and casinos improving relationships.
Rogue Casinos will reduce
Rogue casinos are a big problem in the online gaming industry. They crop up and disappear nearly every month. In most cases, gamers are never in a position to verify the legitimacy of a casino and their licensing details. It’s difficult to distinguish between a genuine and a rogue casino. Sometimes even when a casino is registered, they have algorithms tailored to defraud players.
Bitcoin will help reduce rogue casinos even more in the future. By decentralizing management, players will have more power to check how the casino and games are run. Players will verify licenses, algorithms and anything else that rogue casinos have always hidden from them.
Bitcoin Casinos will have Global Reach
With traditional casinos, players often must come from specific countries or regions. With sports gambling especially, gaming companies have licenses that limit them to specific regions. This will certainly change as more companies integrate their services with bitcoin. Cryptography and bitcoins are designed to help companies decentralize their services. Governments hardly interfere with how bitcoin startups run.
In the future, bitcoin casinos will not limit players based on regions and countries. A casino anywhere will welcome players from around the world. This is already happening with bitcoin casinos. However, it’s not as prevalent as it should. The adoption of bitcoin technology will crash boundaries that were often put in place to limit players.
Language and payment issuers are a big block for enhancing online casino services worldwide. Most casinos could only offer communications in one language. But that has since changed. Casinos offer players the opportunity to use their services using the ideal language.
However, the traditional, centralized nature of casinos still makes it impossible to accept payments from players worldwide. Most companies find it difficult to cooperate with banks from some countries. With the integration of bitcoins, casinos won’t have payments issues anymore. Anyone can own Bitcoins and use them to send payments anywhere around the world seamlessly.
That plus the fact that casinos won’t have to battle credit card payments anymore due to chargeback claims make it lucrative for casinos to use bitcoin payments wholly.
More Games in one Place
Since bitcoin payments enhance management, companies will likely introduce more games on their platform. Players will have more versatility whether they love to play computer or mobile games. At present, each casino lists a specific number of games on their website. Bitcoin will help developers come together and avail games to one platform easily.
Virtual Goods Management
Perhaps the biggest benefit of bitcoin casinos will be the ability to own virtual goods. For long, in-purchases made by players are held and managed by the gaming companies. This will change as the bitcoin payment protocol enable players to own their virtual goods wholly. Players will also be able to sell these virtual goods easily and redeem their earnings into cash.
The impact of bitcoin is already being felt in the online casino industry. Early adopters are already experiencing the benefits of the technology. In the future, more casino companies will adopt bitcoins, and both players and casino companies will benefit from the technology.