Bitcoin and the blockchain in general have disrupted many industries and the online gambling industry was not spared. Online casinos that don’t use the blockchain are having a hard time competing because the Bitcoin ones work so well.
If you are looking to invest in an online casino then you should be thinking about a Bitcoin casino as the future of traditional server based casinos is uncertain.
There are far more benefits like security and confidence that the system is working fairly with Bitcoin over traditional. We’ll go over how a Bitcoin casino works so you can make an informed decision before you jump into the fray.
There are a few reasons that Bitcoin is reducing the cost of online gambling. One is the substantial reduction in fraud.
Since transactions are all verified and immutable on the blockchain, there is virtually no way that a user or even the casino can try any fraudulent activity. When there is fraud, the losses are not absorbed by the casino. They are passed onto the users in the way of higher fees.
There is no middleman when it comes to payment processing either. In a typical banking situation, transactions need to be verified by a third party. This not only slows the process down, but it costs banks money to use this service. Once again, the cost is passed onto the casino in the way of fees which the casino then passes on to the consumer.
Bitcoin transactions don’t need third party verification as the blockchain itself is the proof. Each block gets verified and then “sealed” so there is no way to alter that block making it much more secure and doesn’t need a third party to verify.
Some online casinos charge up to 10% in fees to play, but a Bitcoin casino generally tops out at around 2%. Cashing out is instant and costs a fraction of what it would normally cost. The only downside is finding where to sell Bitcoin if you don’t want to keep it.
More confidence in the system
Anybody can look at the blockchain to find specific transactions. This means that if an online casino is not solvent, it will be immediately clear to anybody looking. There is no server as the blockchain is located on thousands of computers.
If a game has a payout of $100,000 on a regular online casino, how can somebody know if they actually have the funds to pay out if somebody wins? The simple answer is that nobody can. Market rules don’t really apply here as an online casino that doesn’t pay out winnings won’t last long, but many don’t care. They simply take the money and run.
A Bitcoin casino has their wallet visible to anybody so they can’t possibly try to defraud anybody of their winnings. Even the games themselves are less likely to be fraudulent due to a system called Provably Fair technology. Once again, it is the blockchain that makes this possible.