Gambling has always been considered taboo. And although it’s become legal in some countries, it’s still something that is frowned upon by society. Is it even possible to use cryptocurrency to gamble online without being traced? Below, we look at how you can use cryptocurrency for gambling, as well as the advantages associated with that.
What Is Cryptocurrency?
In short, cryptocurrency refers to any digital currency stored in a virtual wallet using cryptography (a mathematical problem-solving technique). These are peer-to-peer currencies that enable faster payment transfers and lower fees than traditional banking methods. The most common cryptocurrencies include Bitcoin, Litecoin, Dash, and Monero. There are many other types of cryptocurrency out there, including Ripple, Dogecoin, etc.
How to Use Cryptocurrency for Online Gambling
Now let us take a look at the various ways in which you can play casino games using cryptocurrencies. It may not be as easy as you first think!
1. Virtual currency exchange
This one seems pretty straightforward – you send funds from your bank account or credit card into an online wallet where you deposit them into a gaming platform that accepts this particular type of currency. You then receive points or credits that you can later cash out via withdrawal or conversion back to fiat money. This method works because these services will convert the money received into local fiat currency and transfer it to the appropriate country.
Pros: Easy and fast way to make deposits.
Cons: Requires the use of a third-party service such as Coinbase or BitPay. Fees can add up. Not all casinos accept cryptocurrency payments immediately. Deposits require verification.
2. Crypto wallets
Once again, this involves sending funds directly to a crypto wallet. If you choose this option, then you don’t need to worry about converting to fiat money first. However, if you hold more than $10,000 worth of crypto, then you will have to pay taxes on your gains each year. So, unless you do this regularly, then it might not be a good idea.
Pros: No additional costs incurred by transferring money overseas. Money comes straight off the blockchain. You don’t have to give away personal information to a third party.
Cons: Need to store offline private keys carefully. No centralized management tool.
3. Exchanges
By depositing currency through an exchange, rather than directly into a virtual wallet, then it becomes easier for exchange operators to trace transactions. They can see exactly what happens when you buy tokens. This means they can stop illegal activity and prevent tax evasion. On top of that, exchanges are usually safer than dealing directly with another person.
Pros: Access to a much broader range of options than with direct purchases. Faster withdrawals compared to credit cards. Better security measures are in place.
Cons: More difficult and time-consuming process than buying directly. Higher transaction costs. May incur extra charges like KYC/AML checks.
Advantages of Using Cryptocurrency for Gambling
1. Minimal risk
When using fiat currency, you run the risk of losing money due to inflation, government regulations, and volatile markets. With cryptocurrency, however, the price remains stable over time. In fact, in some cases, the value of individual coins has increased significantly since their inception. So, even though the market is quite unpredictable, it is unlikely you will lose all of your hard-earned investment.
2. No geographical barriers
Cryptocurrency is designed to operate across borders. This allows people who live, work, and play anywhere around the world to participate and compete without having to limit themselves to the financial system controlled by their home countries.
3. Low fee
The majority of companies currently accepting cryptocurrencies charge minimal fees for users (usually no more than 1%). It should also be noted that most casino sites already offer bonuses of 30% and more, so many players often find it worthwhile to deposit small amounts every now and again to take advantage of extra promotions.
4. Reduced transaction times
One of the biggest concerns for new gamblers is how long it takes to withdraw any winnings. Some jurisdictions, including Spain and the USA, charge high processing fees. Others take weeks to clear out player accounts. When gambling online, this concern vanishes instantly thanks to bitcoin mining technology. All transactions are recorded within 10 minutes of being completed. Players just wait until they are ready to collect their funds.
5. Privacy & anonymity
In conventional banking systems, personal information is given up at each stage – from opening an account to making a withdrawal. There is nothing anonymous or private about this type of approach. The same applies to gambling sites that restrict access based on user age and location. With crypto casinos, there is little need for these types of restrictions since all data is stored privately on the blockchain. This makes it possible for customers to remain completely anonymous while still accessing real casino games.
6. Safety
Bitcoin and other currencies are protected against hacking attempts by keeping records permanently online. For example, if someone was to try to steal your details by gaining unauthorized entry to your computer, this would not happen because all the information is safely saved on the public ledger.
Many casinos use third parties or outside software providers to track player behavior or collect data about them. When transacting through your own bank account, you retain complete control over your privacy. No company knows which transactions you perform, not even the government. Plus, there are no reporting requirements so nobody can ask where your cash came from, or what you did with it after winning.