A Complete Guide to Cryptocurrency Gambling
Posted by Harry Kane on Sunday, September 26, 2021
As anyone with even a passing knowledge of cryptocurrency will testify, the market has undergone incredible volatility at the beginning of 2021. More specifically, the total market cap of the crypto space has declined from just over $2 trillion to $1.65 trillion on August 1st, while it had previously plunged even lower against the backdrop of a sustained price crash.
However, this volatility shouldn’t distract from the long-term growth of the market as a whole, which is expected to expand at a compound annual growth rate (CAGR) of 7.1% from 2021 through 2026.
This long-term growth potential is also expected to impact on individual assets such as Bitcoin (BTC), which has shelved approximately 50% of its total value since mid-April but retains a price that’s more than three-times higher year-on-year.
This growth is in part being driven by the wider applications of cryptocurrency, including online gambling. In this post, we’ll provide a comprehensive guide to crypto gambling, while asking how you can safely get involved in this thriving market.
Getting Started – Making the Case for Crypto Gambling
In many ways, cryptocurrency gambling represents the successful fusion of two highly lucrative and fast-growing markets, but this isn’t the only reason why you should consider wagering using digital currency.
We’ve outlined the broad case for crypto gambling below, by exploring some of the key benefits that are inherent to the blockchain technology that underpins individual assets and tokens.
1. Recognising the Immutable Nature of Cryptocurrency
Blockchain is essentially a decentralised ledger technology, which creates a comprehensive and immutable store of every single transaction made.
This negates the risk of third-party manipulation by casino operators, which is highly advantageous given the rising prevalence of rogue brands in a lucrative and increasingly competitive marketplace.
Put simply, those who frequent a crypto casino can deposit and withdraw cash safely and with genuine peace of mind, without worrying that they’re funds are being hacked by unscrupulous operators or having to allow for even nominal transaction fees.
This elevates crypto transactions to a whole new level of transparency, which is ideal in an iGaming marketplace that has struggled to maintain a reputation for fairness and integrity as it has continued to expand throughout the digital age.
Of course, critics will point to the relative failure of the ‘Edgeless’ project, which was the world’s first, Ethereum-powered crypto casino to launch back in 2018. This pioneered a completely transparent and holistic online casino experience, and one that pledged to do away with transaction fees and the historic house edge boasted by casinos.
While the platform may have been caught up in the infamous crypto bear run of 2018 and struggled to capture the imagination of players, however, the concept remains an undeniably viable one.
In fact, it may be argued that this was just a little before its time as a concept, and there’s no doubt that new and exciting crypto casinos with a similar mission statement are continuing to launch on the marketplace.
This evolution will be helped by the increasingly sophisticated nature of third-generation crypto assets and the much-vaunted launch of Ethereum 2.0 (we’ll have a little more on this later in the piece), and it will certainly enable operators to build on the uniquely immutable nature of blockchain and crypto assets.
2. Benefitting from Increased Security
Of course, the immutable nature of blockchain also translates into greater transactional security, by making it incredibly hard for the receiving party (in this case the site operator) to steal your hard-earned money.
Much of this has to do with how crypto transactions work. More specifically, crypto wallets utilise public-key cryptography to secure transactions, with this system featuring pairs of keys (namely a public and a private entity).
As the name suggests, public keys may be known to others, and are used to encrypt a message or request for payment. However, this message can only be decrypted by the receiver’s unique private key, which can be stored securely by the wallet holder to create a fortified layer of security.
We’ll touch more on how you can use this system to make yourself even more secure when wagering using crypto tokens later in the piece, but this definitely adds a further layer of security when wagering online.
Remember, modern day casinos are safeguarded by 128-bit SSL encryption, which is a minimum standard within the industry and helps to maintain the integrity of each individual transaction completed online.
Given the scope of the iGaming market and the number of people who now wager online regularly in the UK alone (there were a total of 31.57 million active accounts in the UK as of September 2019), the enhanced security offered by cryptocurrency has been welcomed by players across the board.
3. Making Instant Transactions
On a final note, it should be remembered that cryptocurrency assets support transactions that are as instantaneous as they are secure.
While most payment methods used by online casinos allow for instant deposits, the same rule doesn’t apply to withdrawals.
In fact, withdrawing money through bank transfers can take up to five working days, while processing payments through Visa debit cards may take 72 hours in total. Even using e-wallets like PayPal and Neteller may compel you to wait up to 24 hours for funds to reach your account, and this may prove inconvenient for a generation of gamblers who are used to instant gratification.
In contrast, you can use crypto assets to withdraw your winnings to a secure wallet immediately, without any delays or the imposition of pesky transaction fees (which remain in place in some casinos and across more traditional payment methods).
Similarly, you can credit your iGaming accounts instantly with cryptocurrency (where allowed), which is ideal whether you’ve just registered with a new opportunity or want to capitalise on a real-time bonus offer.
How to Gamble with Cryptocurrency – A Step-by-Step Guide
Now that we’ve made the case for betting with cryptocurrency, it’s important to understand how you can wager with assets such as Bitcoin (BTC) in practical terms.
We’ve broken down this process into a step-by-step guide below, so that you can take your first steps wagering with your chosen crypto asset assuredly!
1. Open a Cryptocurrency Wallet
If you don’t already own a crypto wallet, you’ll have to start your journey by opening one that can be used to store and manage your holdings.
There are a huge number of wallets on the market, which are split into numerous categories and types. The two primary categorisations are hot and cold wallets, the former of which require an active Internet connection and enable you to access your funds in real-time.
As a result, hot wallets (such as desktop and mobile platforms) are ideally suited for making frequent and small transactions, including those that are synonymous with the vast majority of online gamblers in the UK.
Remember, Brits spend an average of just £2.60 per week on gambling, totalling a little over £135.20 per year.
In contrast, cold options such as ‘hardware’ wallets are considered to be far more secure as they’re not connected to the Internet, and instead resemble standalone USB devices. Because of this, such wallets would only really be suitable for high-rollers, who can securely transact huge sums of money while minimising the risk of being hacked.
If you do choose a hot wallet, we’d also recommend prioritising “non-custodial” platforms such as Atomic Wallet, which is completely decentralised and affords you complete control of your private key. This is diametrically opposed to custodial wallets, where your private key may be stored on a centralised exchange and vulnerable to the machinations of hackers.
We’d also recommend creating an additional layer of security when using a desktop device, by storing your private key in a password-protected folder.
The process of actually creating a wallet is simple: as you register with unique password and are rewarded with a seed phrase that can be used to generate private keys. You should also secure this in a safe location, such as an offline safe or USB storage device.
2. Find a Casino
Next up, you’ll need to identify a licensed and reputable casino that accepts one of more crypto tokens.
Usually, online casinos accept tokens such as Bitcoin (BTC) and Ethereum (ETH), which are the two most widely-used assets in the space and the largest from the perspective of market capitalisation.
Remember, Ethereum was also the platform on which the Edgeless platform was built, while various developers have capitalised on the blockchain’s Dapp-building functionality to create specialist crypto casinos such as ‘Bit Startz’ and ‘FortuneJack’.
Regardless of which casino your select, we’d recommend that you go through all the usual protocols when making your decision.
More specifically, take the time to ensure that the casino in question is fully licensed and regulated by the Financial Conduct Authority (FCA), while also ensuring that it has an adequate games’ library and outstanding customer service.
We’d also recommend reading independent reviews and the first-hand experiences of users, so that you can create some additional context and make a far more informed decision as a punter!
3. Make a Deposit
Now the time has come to make your first deposit! Of course, this process starts by ensuring that you have money in your crypto wallet, with most platforms enabling you to buy your chosen assets with a debit or credit card.
You can also link your bank account directly to your crypto wallet, although many avoid this as it undermines the private and anonymous nature of cryptocurrency while increasing the potential impact of fraud.
However, you’ll probably have to buy in at a minimum rate, so keep this in mind when looking to wager with cryptocurrency for the first time.
Once the funds have landed in your wallet (this process should be instantaneous), you just need to keep the resource open while logging into your casino platform and accessing your new player account.
At this stage, you’ll navigate the casino’s unique deposits page as normal, before selecting the relevant crypto options in the payment section. You’ll then follow some specific instructions pertaining to the individual site in question, but the transaction should be completed in a matter of moments.
The funds should also land instantly in your account once the process has been completed, so long as your new iGaming account has been fully verified and you’re eligible to start wagering with real money.
4. Mind the Gap in Value
Of course, one of the pitfalls of crypto gambling is the inherently volatile nature of assets such as BTC.
As we’ve already touched on, the value of BTC has almost halved since breaking above the $60,000 barrier in mid-April, although it retains a considerably higher price than it did precisely 12 months ago.
This can impact directly on the value of your bankroll in real-time, causing it to fluctuate wildly and make it hard to plan your activity or manage your cash with any great confidence. There may be pros and cons to this depending on how the market moves, of course, but it’s not exactly ideal for either casual gamblers or high-rollers.
The truth is to minimise your real-time bankroll and the amount in your wallet at any given time, as you use this as a way of separating your gambling capital and reducing the impact of live (and sizable) price shifts.
The Last Word
There are undeniable benefits to wagering at crypto casinos, from improved transparency and anonymity to the fact that you can separate your bankroll from the remainder of your funds in a secure wallet.
Crypto gambling is also becoming easier and more seamless than ever before, especially as the number of tokens accepted by operators remains on the rise. This includes gambling-friendly crypto assets like Dash, which boasts an incredibly simplistic and transparent model that has been designed to target the iGaming market and individuals who are new to blockchain technology.
Dash is also one of the cheapest tokens accepted as online casinos, although it’s not widely available in the current marketplace.
Regardless, there are numerous reasons to wager with cryptocurrency in 2021, while you can also take several proactive steps to enhancing the experience further and safeguarding your assets!