Are Crypto Casinos Safer Than Traditional Sites?

Posted by Harry Kane on Tuesday, January 30, 2024

As iGaming tech stacks continue to evolve and world becomes increasingly connected, we’ve seen significant growth in offshore and crypto gambling across the world. This is even true in mature and well-regulated markets like the UK, where non-traditional brands can target players and offer a less intrusive gameplay experience.

Crypto betting sites are particularly appealing, as they combine decentralised blockchain technology with Telegram integration to drive far greater levels of anonymity. But are crypto betting sites inherently safer, or do they raise new security issues that players need to keep in mind? Let’s get into it!

What are the Differences Between Crypto and Traditional Sites?

Before we delve deeper into the safety and security aspects, it’s important to understand the core differences between cryptocurrency and traditional betting sites. We’ve summarised these differences below, so that you can gain a basic insight into what you should expect when registering for an account.

• – Crypto Sites Require Less Information During the Signup Stage: One of the main draws of cryptocurrency sites is that they offer enhanced levels of privacy and anonymity. This is particularly true in the case of Telegram-integrated sites, which often enable you to register for an account with just a verifiable email address. Conversely, traditional, licensed sites have to comply with Know-Your-Customer (KYC) and similar protocols and require you to provide personal data such as your name, date-of-birth and corporeal address.
• – You Can Wager Using Selected Crypto Tokens: This is perhaps the most obvious difference, as crypto sites are categorised as platforms that enable you to deposit and withdraw using selected digital tokens. Many may combine cryptocurrencies such as Bitcoin and Ethereum with fiat banking options, including Visa, Mastercard and ewallets (depending on jurisdiction in which it’s licensed). This affords such sites a genuine competitive advantage, and one that gives you far greater control over your experience as a player.
• – Crypto Transactions are Secured by Private Keys: If you wager with a licensed crypto casino (we’ll touch more on the importance of licensing below), this site should boast 128-bit SSL encryption as a minimum standard. However, financial transactions and data are also safeguarded by public and private keys. The former encrypts the data, whereas private keys are securely stored on your device and decrypt the data (enabling you to access your funds securely).

In Theory – Cryptocurrency Sites are Safer Than Traditional Alternatives

The latter difference is interesting, as the combination of SSL encryption and public and private keys theoretically make crypto sites safer and more secure. Then there’s the immutable and transparent nature of the blockchain technology that underpins cryptocurrency, which adds another layer of trust and security to the process of crypto gambling.

Crypto transactions are verified using either Proof-of-Work (POW) or Proof-of-Stake (POS) depending on which token you use. These protocols vary in that the former uses a competitive validation method to confirm transactions and add blocks to the chain, where POS utilises randomly selected validators within a pool to verify payments.

These transactions are then stored immutably on the ‘block’, providing complete transparency across all payments and helping to safeguard against fraudulent activity. Remember, there’s no third party or central authority that oversees blockchain functions either, reducing the risk of payments being manipulated or money being stolen over time.

Even on a fundamental level, decentralised storage on a particular blockchain is highly secure, while it’s also an inherently reliable solution from the perspective of storing data. This, combined with cryptographic algorithms such as RSA and SHA-2, helps to create safe and secure transactions that makes funds impervious to hackers or individuals with a Machiavellian intent.

Many contemporary crypto tokens are also built on open-source code, which is accessible to everyone and completely transparent. As a result, anyone can quickly view, contribute or augment existing code, which in turn helps with the quick patching of bugs and the eradication of potentially damaging security vulnerabilities.

Are There Security or Safety Drawbacks When Using Crypto?

The answer to this question depends on what you mean by ‘safety’ or ‘security’. While crypto transactions are inherently safer than traditional alternatives, most cryptocurrencies are also volatile by nature and prone to wildly fluctuating valuations. Even established and highly liquid tokens like Bitcoin are vulnerable to this, with this asset having seen several price crashes and hikes since its inception in 2009.

This creates a significant challenge for bettors, as does the fact that crypto can still be targeted by sophisticated hackers and (in the worst-case scenarios) rogue casinos that are established for the purpose of harvesting your money. Of course, these issues aren’t exclusive to crypto platforms, while such entities are arguably better placed to safeguard your cash and data.

Ultimately, it’s fair to surmise that cryptocurrencies offer significant safety and security and advantages over traditional casinos and sportsbooks. While they’re not completely anonymous, they’re also considerably more private, while the combination of crypto and fiat payment methods afford players genuine flexibility in terms of how they fund their activities.

However, they also create a couple of challenges that you won’t find when wagering using fiat currencies, and it’s important to factor this into any decisions that you make. Certainly, managing your bankroll can prove challenging during cryptocurrency peaks and troughs, especially when dealing with high value tokens such as Bitcoin.

Ultimately, you’ll need to understand the benefits and drawbacks of both cryptocurrency and traditional betting sites before choosing the option that’s right for you. If you do choose to wager at a crypto site, it’s important to ensure that this entity is licensed by a reputable entity such as the Curaçao licensing authority. Make no mistake; all crypto or Telegram-integrated sites should still be licensed and regulated by a reputable body!