Bitcoin has been used for online gambling since 2009 with the currency initially becoming popular among online poker players in the USA who looked to sidestep strict regulation. Since then, Bitcoin has grown to accommodate a much broader audience thanks to its low costs, high speed and trustless nature. This article is going to examine Bitcoin’s role as a gambling currency over that of its rivals, like the US Dollar, Euros and even other cryptocurrencies like Ethereum as well as some of the pioneers in the world of Bitcoin casinos.
It is no secret that the size of the Bitcoin gambling market is still far from that of its US dollar counterpart. In 2018 the global online gambling market is anticipated to be as much as $52bn. While the estimates for Bitcoin are far less clear, it is likely that this market remains less than $2bn – a fraction of the overall industry. But this is all changing; each day Bitcoin is becoming more and more widely recognized as a legitimate banking method for many online casinos. Our current list of Bitcoin casinos stands at 141 and this does not account for the myriad of smaller casinos which offer proprietary games like Bitcoin Dice.
There are a number of factors that determine whether Bitcoin would be a more suitable currency for gambling:
In countries where online casinos are easily accessible with US dollars, the need for Bitcoin as a means to sidestep regulation is negligible. Of course, sidestepping regulation with the user of a cryptocurrency like Bitcoin could be illegal – so please check your jurisdiction – however it is no surprise that gamblers have used Bitcoin in this way. For those residing in countries that have banned online gambling, this facet of Bitcoin is unsurprisingly appealing.
The right to privacy is widely accepted when it comes to personal data and identity, but when discussing finance the general public considers privacy to be synonymous with illegal activity. From an idealistic point of view, every individual on this planet should have access to the security that privacy provides, whether it is for personal data or money. Bitcoin allows users to gamble privately, without the consent of others or the risk of confiscation.
Bitcoin transactions are permissionless, which means that a transaction can be sent without any interference from a 3rd party. While payments themselves may take 30 minutes to “confirm”, the lack of a 3rd party’s interference can increase the speed of a casino deposit from days to minutes.
These are just a handful of reasons that one might choose Bitcoin over US dollars for gambling, however there are countless more. Bitcoin grants its users an unprecedented level of ownership that has not been seen for centuries. If any of the reasons above are relevant to your situation, then it may be that Bitcoin is a better option for gambling than the US dollar.
Those more familiar with the cryptocurrency market will know that Bitcoin is just one of many. A significant proportion of crypto gambling sites have adopted more than just Bitcoin deposits and withdrawals; they have included Ethereum, Monero and DASH among many others. The reason for this is simple, in Bitcoin’s current state, it does not offer the “complete package”. Here are the most significant areas in which Bitcoin currently lacks:
Bitcoin is not as private as the mainstream media would have you believe. In fact, there have been countless times where a Bitcoin transaction (or series of transactions) has led to the identification of individuals. Remaining private on Bitcoin is possible, however another cryptocurrency such as Monero has ultra-private transactions built in by default. Monero uses Confidential Transactions and Stealth Addresses to make casino deposits and withdrawals (or any other transaction) completely private. For those gamblers interested in absolute privacy, a coin like Monero would be preferable over Bitcoin.
We have written about Ethereum casinos and smart contracts before, but this point is worth reiterating. A smart contract allows a user to check – with certainty – that a transaction will trigger a predetermined series of events without the intervention of any middleman. These smart contracts have applications across a huge range of industries, however gambling is one of the first that it is tackling. Someone using a casino built with smart contracts would require zero trust in the casino in which they are playing. Bets are placed and winnings are paid without any possibility of interference using provably fair randomness. As this technology improves, Ethereum casinos are likely to be a major player in the market with FunFair currently leading the pack. Bitcoin does not yet have smart contract functionality, meaning that this level of trustlessness is simply not possible; players must still trust the casino to payout fairly.
Nano (formerly RaiBlocks) is a payments-focused blockchain that is beginning to demonstrate an ability to settle transactions rapidly and at scale. Other blockchains like Ripple (XRP) are also capable of fast deposits, however the lack of decentralization in Ripple makes it ripe for censorship (particularly around gambling). Online casinos which accept Nano are among some of the fastest in the industry, settling deposits in seconds as opposed to minutes as seen in Bitcoin. Nano is still a relatively new blockchain and it is yet to demonstrate an ability to handle scale whilst remaining decentralized, however it is in a prime position to disrupt the online casino market further. Keep an eye out of casinos which accept Nano deposits.
This article may have demonstrated that Bitcoin is far superior to US dollars, but the competition it is facing from other cryptocurrencies has casted some doubt. Bitcoin excels in a lot of areas, but the reality is that it simply does not “win” across all the key facets of a useful casino currency. This may change in the next 12-24 months as we see two major technologies take hold.
In March 2018 one of the most anticipated implementations of Lightning reached “main net” and was available for public use. Lightning allows users to open payment channels “off chain” to allow for instant and private transactions without the need to record every payment on the Bitcoin blockchain. With a payment channel, only two transactions need to occur on the Bitcoin blockchain – one for opening the channel, and one for closing. The number of transactions inbetween the time a channel is opened and the time that is closed is theoretically infinite. There are multiple teams working on interoperable Lightning implementations for the Bitcoin network and this technology is likely to be adopted by existing Bitcoin casinos.
The Lightning network adds a further layer of privacy to Bitcoin transactions however it is not entirely private as the public Bitcoin blockchain is still required for settlement. Fortunately for those who are privacy-concerned, a technology known as “Mimblewimble” (a reference to a Harry Potter secrecy spell) has the potential to enter the Bitcoin space through a sidechain – much in the same way that Lightning will be implemented. This technology is some months from completion, and may be first adopted by other blockchains before moving to Bitcoin (see Grin coin), however its eventual use on the Bitcoin blockchain would improve privacy to a point of complete anonymity.
Bitcoin may be a less than ideal gambling currency today, however it is already miles ahead of US dollars and may quickly transcend every other cryptocurrency to become the king of all gambling coins. Find our full list of Bitcoin casinos right here on The Bitcoin Strip, and take a look for yourself just how vibrant this market is.
Sign up for exclusive bonuses from TheBitcoinStrip