The role of crypto and blockchain in the gaming industrySep 7, 2021, 3:28PM
Blockchain technology is used in online gambling, betting, and casinos because it allows for transparency in transactions.
Bitcoin became mainstream over the past four years and many online casinos started accepting cryptocurrencies.
There are many open-source lotteries that are currently in development. For example, the return to player ratio of lottery sites is often kept secret. Players are often skeptical about the site, believing it to be a scam. However, blockchain allows them to see how transactions are being processed and solves this problem. Blockchain allows you to see exactly where your money goes when you lose it online. This allows you to see how much the website makes from your deposit and how trustworthy it is.
The use of blockchain for online gambling or casinos will become more common in the future. Already, we are seeing projects that use blockchain payments to disrupt the industry. This provides complete security for their players and is becoming increasingly popular.
Blockchain solves the problems
Many sites that offer non-traditional games, such as poker or blackjack, are not regulated either by the UK's Gambling Commission (UKGC) or the Malta Financial Services Authority(MFSA). These sites may not provide any information about how winners are selected, who wins, or whether winnings are returned to players. They could also be scam sites.
This is because blockchain eliminates the need to have regulators. Because blockchain technology and transparency of transactions allow you to see your money and deposits. You can also see which players have lost and how they affected your winnings. Players will not feel cheated by the transparency of the site's earnings from every transaction.
Gambling vs Crypto
It is rare to find people who are both interested in gambling and cryptocurrency. While gambling has been around for hundreds and years, crypto is relatively new. This means that it attracts younger, more tech-savvy individuals. This fact often becomes the reason for online gambling portals to provide extensive promotional campaigns and packages, such as welcome bonus programs to attract crypto gamblers or encourage traditional gamblers to switch to crypto. Quite a few online crypto platforms offer a certain percentage deposit bonus if the clients choose to play baccarat, slots, roulette, or other games with crypto. Such promotions are usually not available for traditional plays.
Gamblers are drawn to gambling for entertainment purposes and don't mind losing their money. Gambling isn't appealing to younger people because they want to see a return but also recognize that the house always wins so it's risky. This type of person uses crypto to transact, much like foreign exchange traders. They will see a return if they invest in cryptocurrencies such as Bitcoin and other well-known currencies.
What are the risks associated with gambling with cryptocurrencies as compared to fiat?
There are no different risks for fiat and crypto when it comes down to scamming. Some sites may try to steal money or refuse to payout. However, the methods used to do this can differ. There are ways to lower the risks for both currencies. It is important to use well-known gambling websites.
Online gambling and betting sites that host games should be audited by regulatory agencies. If they are, it is highly unlikely that the games will scam you. However, the site might still attempt to scam you by claiming that the player did not provide the correct documents or attempting to avoid paying out if he wins.
Because crypto and blockchain are transparent, players can track their funds and make safer bets. Crypto-based scammers are less likely to succeed. They don't have to incorporate a regular payment gateway or have escrow funds. The site can steal your crypto and refuse to pay you out simply by not being regulated.
Anybody can create a website and host games. Then, they ask users to deposit crypto in order to play. It doesn't work. It's easier to make a scam website like this. However, over time crypto is headed towards establishing itself as a mainstream concept and there are quite a few renowned gambling sites that use it. As such, the chances of being scammed are much lower.
The regulatory issues surrounding blockchain, cryptocurrency, and gambling
It is crucial to trace the source of funds when it comes to issues like gambling, blockchain, and crypto. It is easier for regulators and players to track the source of funds if they make deposits using bank transfers or credit cards. They need bank accounts. To open one, they must provide proof of identity and undergo verification checks.
Banks must also prevent money laundering. They will ask account holders about unusual activity and where the funds came from. Crypto allows users to send money to a wallet ID and it isn't audited so the money can come from any source and any activity.
Regulators need proof that the money came from, but they cannot force players to disclose this information. If the site operators do not have strong measures to request a source of funds, it will be impossible to trace its origins. Cryptocurrency is unfortunately the best method to launder money.
Need for stricter ID verification
Crypto-based gambling websites should be treated in the same manner as sites that use fiat currency. They must comply with regulations, require identification (such as date of birth), and request the source of funds. This isn't done as a requirement for crypto-based gambling sites.
Many gambling sites are also based in Armenia and Georgia, which is less regulated. Many payment gateways won’t offer their services to sites based in dangerous jurisdictions. However, crypto-based websites are flourishing there as they don’t need to ask permission to take payments.
Although regulators are working to make crypto-based transactions more secure, it will be a difficult road ahead. As long as players agree to the terms of service, it's up to them to decide if the site is legitimate.
Disclaimer: information contained herein is provided without considering your personal circumstances, therefore should not be construed as financial advice, investment recommendation or an offer of, or solicitation for, any transactions in cryptocurrencies.