Gambling with Ether comes in two different forms. The first, and currently the most common, is the ability to use Ether as a deposit and withdrawal method at various online casinos. This works in the same way to Bitcoin and provides an alternative payment method to traditional fiat currency (USD, EUR, GBP) transactions. This type of Ethereum gambling is the easiest to understand and the most popular. Our list of the best Ether casinos above all support this method of gambling with the cryptoasset.
The second approach to Ethereum gambling is the use of smart contracts to place bets. Currently, there are a number of casinos which operate entirely on the Ethereum blockchain. Instead of sending Ether to your casino’s wallet address, you send the ETH directly to a smart contract. From this point, the smart contract generates randomness and pays out based on whether the player wins or loses. Some advantages to smart contract betting in Ethereum are:
- The casino does not hold your funds at any point, so there is no risk of loss
- Payouts are made by open source code and cannot be interfered with
- Payouts are immediate. No matter how large the winnings, you are guaranteed to get paid and paid fast!
Currently the only major downside to gambling with an Ethereum smart contract casino is that each bet takes time to process. Due to technical reasons surrounding the security of the blockchain, each bet will require at least 1 block confirmation (roughly 15 seconds) before the winning bet can be decided. For larger bets, it is possible that the wager can only be processed after several block confirmations, which could take many minutes. Gambling with Ether in this way would put off many players who are happy to place their trust with a traditional casino in return for faster betting.
However, the problem of waiting for block confirmations is slowly being resolved. Casino protocols like FunFair.io are developing “offchain” payment channels to handle bets without requiring a block confirmation for each bet. These payment channels take the strain off of the blockchain without significantly compromising security. As a result, the promise of smart contract betting is becoming ever more likely to reach a mainstream audience in the years to come.
In November 2018, FunFair announced their first casino brand to launch using their Ethereum state channel technology, CasinoFair.com. However, the vast majority of smart contract casinos listed below will require at least 1 block confirmation. That said, this is still the most secure way to bet at an online casino – all thanks to the Ethereum Virtual Machine.