Ever wondered how crypto casinos work? It all starts with cryptocurrency.
Bitcoin and many other cryptocurrencies are revolutionizing not only how we invest, bank, and use money but also how we gamble online.
Transactions are more secure and transparent, not to mention generally faster and cheaper. Furthermore, as most cryptocurrencies are not controlled by a central authority like real money is, they also offer more privacy than using regular money. Thanks to those benefits, casino players have been drawn to crypto casinos like moths to a flame.
For many, there seem to be few reasons to remain at traditional online casinos. It’s not like crypto casinos cannot offer the same quality slots, live dealer games, or offer as good bonus deals. In fact, they’ll often offer more games from more providers, and their bonus deals are usually more lucrative.
Throughout this guide, we’ll discuss the basics of crypto and how it works in more detail while also explaining its increasingly influential role in the online casino industry.
What Is Cryptocurrency?
A cryptocurrency, whether Bitcoin, Ethereum or any of the countless others currently available, are digital currencies that operate independently of banks and financial institutions.
They’re built on top of blockchain technology, which are essentially decentralized digital ledgers that record transactions in highly secure blocks as they pass through the blockchain from one crypto wallet to another.
There are no third parties, such as banks, getting in the way, and depending on the cryptocurrency used, most transactions are not controlled by a central authority. That decentralized aspect alone allows cryptocurrency transactions to be completed faster, cheaper, and more privately.
On that last point, a transaction does not require a name or bank account. Instead, it only requires the public keys of the sender and receiver and the amount sent. That is perfect for those who want to keep their online gambling private.
We should also point out that cryptocurrency transactions are more secure than traditional fiat transfers. Each step of a transaction is not only permanently recorded on the cryptocurrency’s blockchain but also protected by strong cryptography that encrypts transactions to ensure no unauthorized access or transfer is possible.
Cryptocurrency Explained
Cryptocurrencies are:
- Digital currencies that are designed to be used across the internet.
- They are decentralized, meaning they’re not controlled by a central authority.
- Transparent as transactions are recorded on a blockchain
- Highly secure thanks to strong encryption technology.
- Sent as peer-to-peer transactions that are, in most cases, complete almost instantly.
- Have no middlemen involved in transactions, meaning lower fees and more privacy.
The many benefits of cryptocurrencies make them perfect for online gambling, whether at online casinos or sportsbooks. That’s why it is no surprise that players can now choose from many crypto for gambling. Bitcoin is the most commonly used, but Ethereum, Litecoin, Doge, and many others are also often supported at the best crypto casinos.
How Does Crypto Work?
For anyone who has yet to use cryptocurrencies, it can be overwhelming at first. However, once you understand how crypto works, like everything else in life, using it becomes second nature.
Below, we’ll take you through how you can purchase and store your cryptocurrencies and send and receive them. Plus, we’ll also throw in how you can use crypto for gambling online.
Buying Crypto
The first step to understanding how crypto works is knowing how to purchase them. If you’re looking to purchase some crypto, there are a few options available to you:
- Buying from a cryptocurrency exchange: You can create an account at reputable cryptocurrency exchanges such as Binance and Coinbase and use it to purchase the cryptos you want. Your digital currencies are stored in a custodial wallet, which is similar to a regular eWallet. You can then transfer your cryptocurrencies out to your own wallet (more on those shortly).
- Using card-to-crypto services: Many crypto wallets allow you to purchase cryptocurrencies directly using a bank card. It is probably one of the most convenient ways to buy crypto, but there are likely to be additional fees, and you may pay higher than the going rate.
- Through eWallets: Even many eWallets, including PayPal, allow you to purchase cryptocurrencies. Again, fees and prices may be higher than at exchanges.
Storing Crypto
Of course, like any currency, whether in physical or digital form, you need a wallet to store your cryptocurrencies.
Essentially, you have three main options.
- The first is to use a non-custodial hot wallet, such as Exodus or MetaMask, which are online wallets that can be downloaded as apps or browser extensions.
- The other and more secure way, as hackers can’t access them, is to use offline (cold) hardware wallets like Ledger Nano X and Trezor.
- The only other alternative is to leave it in your custodial hot wallet accounts at the crypto exchanges you bought it from, though we’d advise against that.
Sending and Receiving Cryptocurrencies
Sending cryptocurrencies is both easy and nerve-wracking at the same time. We’ll use the process for hot (online) wallets as an example:
- Open your chosen wallet.
- Click on Send Payment.
- Choose the cryptocurrency you want to send.
- Choose the network you want to send it across.
- Enter the amount you want to send.
- Enter the QR code or wallet address of the recipient.
- Click Send.
That’s the process in a nutshell, which looks easy, right? Well, we mentioned it can be nerve-wracking. Here’s why. You’ve lost your crypto if you enter the recipient’s wallet address incorrectly and send the transaction. Blockchain transactions are irreversible.
Fortunately, having the option to scan QR codes for wallet addresses minimizes the chances of this happening. We strongly suggest you use those QR codes when you can, rather than mistyping a long and confusing wallet address and losing your crypto.
As for receiving, it simply works the other way around. The sender scans or copies your wallet address and performs the above steps.
Using Crypto for Gambling
Funding or cashing out from a crypto casino account is just as easy. It’s also very similar, as you’re essentially just sending/receiving transactions in a peer-to-peer manner from one wallet to another, much like we explained in the previous section.
When depositing, you fill out how much you want to send and the currency you want to use at the crypto casino. You’re then asked to complete the transaction using your wallet. Again, you can scan the casino’s QR code to ensure a safer transaction.
Note: Many crypto casinos also offer card-to-crypto services. So if you do not have any crypto or a wallet, you can just purchase the crypto directly at the casino, and it will appear in your balance.
Why Crypto Is Ideal for Online Casinos
We’ve touched on many benefits of cryptocurrencies previously, but arguably, they’re even greater for casino players.
- Fast Transactions: Honestly, there isn’t much in it between eWallets and cryptocurrencies in terms of transaction speeds. They’re both almost instant. However, as processing crypto payments is easier and quicker for gambling sites, you’ll get your payments quicker using cryptos.
- Security and Anonymity: As for security, crypto wins hands down thanks to its cryptography and the fact that transactions are immutably stored on the blockchain. As for privacy, you do not have to share bank details with online casinos, and financial institutions have no idea what you’re doing with your crypto – ultimate privacy.
- Lower Fees: No middlemen means lower fees when making crypto transactions. The only fees to worry about are network fees, which vary greatly from crypto to crypto.
Provably Fair Gaming
The final and probably one of the biggest advantages of using cryptocurrencies at online casinos is the provably fair algorithm. While traditional casino games have RNGs that ensure results are random, many crypto games use this algorithm.
The benefit it has over an RNG is that you can check the fairness of results yourself. You no longer have to trust that the game’s RNG has been tested as fair by third-party testing companies.
When a casino game utilizes the provably fair algorithm, the results of each game or session are recorded as an unchangeable entry on the blockchain network associated with the cryptocurrency used for betting.
This ensures the record cannot be modified or removed. Players can then confirm the fairness of their session outcomes using the casino’s built-in verification tools or independent third-party services.
The Future of Crypto in Online Gambling
Crypto casino technology has already advanced significantly, and that progress is unlikely to stop. For starters, crypto casinos are constantly adopting newer digital currencies for their players to choose from. It is common to find platforms supporting dozens or more of these currencies.
The beauty of that, is that each cryptocurrency has its advantages and disadvantages when compared to others. While many players prefer to stick to the usual suspects with the best reputations, others are realising that faster and cheaper transactions can be made with stablecoins like Binance Coin (BNB) and Solana (SOL).
Then, there are the latest trends in the crypto gaming space. NFT casinos, for instance, allow players to earn collectibles as rewards. Some crypto casinos even allow players to purchase their in-house tokens to earn a passive income as the platform grows.
Overall, it is an exciting time to get involved with cryptocurrencies, especially at online casinos. The best part is the crypto gaming space is only going to get better over time!
The Final Word
As you can see, cryptocurrencies are reshaping the online casino industry like never before. We’re now able to enjoy faster and cheaper deposits and withdrawals that are sent securely and privately. Thanks to provably fair gaming, we also don’t have to worry that our results are not fair – as we can check their randomness ourselves!
Want to stay on top of things? Check out our weekly Crypto News at mBitcasino! If you want to start enjoying the many crypto casino benefits, sign up at mBitcasino and make your first deposit using cryptocurrency.