Crypto Betting: What it is and how it works
Over the past decade or more, the world has seen the rise of cryptocurrency. It is now part of every aspect of life. Once just the preserve of techies and fringe finance geeks, nowadays it is just another form of currency.
Cryptocurrencies are predicated on decentralization, security and user anonymity. Therefore, it is hardly surprising that virtual currencies have found a natural home in the gambling sector. Below, we take a look at the different kinds of crypto betting currently taking place.
The first type of crypto to achieve recognition outside the cloistered world of fintech, Bitcoin (BTC) remains the best known of its kind. As a result, it is the most widely accepted among online casinos and betting sites.
Essentially, Bitcoin betting works the same as with any other currency. You register with a sportsbook or casino. Then, select your e-wallet containing your Bitcoin as the primary payment option. Now you can make wagers, deposits and withdrawals the same as any other bettor.
Most good Bitcoin betting sites allow you to link your wallet and play through that. This skips the need for registration at all. It functions in much the same way that logging into a third party site via Google does. So, if that is an option, you can find yourself placing bets even quicker.
After Bitcoin, Ethereum — more properly Ether (ETH) — is arguably the world's second most well known cryptocurrency. Therefore, the bettor will normally find that sites which accept Bitcoin also allow transactions using the coin associated with the Ethereum blockchain. To a great extent, there's little obvious difference when placing bets on most gambling sites using one rather than the other.
However, although Ether can function as a payment option just as well as BTC, the blockchain's function is a little different. It is designed to facilitate smart contracts and other decentralized applications. This means that some gamers and site owners prize Ethereum for its ability to make the betting experience completely fair and above board. It also enjoys a reputation for being less volatile than Bitcoin.
Originally a Bitcoin spinoff, Litecoin's blockchain leans far more towards decentralization. In fact, it was created as a response to some people's suspicions that Bitcoin could be prone to monopolization. This “lite” form offers a wider supply of coins, but conversely lower market value. In money terms, BTC has a market cap of $650bn, while LTC caps out at just $10bn.
Where does this leave Litecoin in relation to betting? Well, although all crypto transactions are fast, Litecoin transactions are the speediest, four times as fast as Bitcoin. Litecoin is also more widely available, easier and cheaper to purchase.
Other forms of cryptocurrency betting
There are a host of other cryptocurrencies out there. Online casinos often accept many of these, so long as they are already crypto-friendly sites. These currencies include, but are not limited to, Tether, USD Coin, Cardano and Dogecoin. They all offer slight variations on each other in terms of market cap and availability, but essentially the advantages remain the same to the average player — speed, anonymity and data security. Unless you're an experienced crypto trader, the only questions you will have regarding betting with these are: Does the casino accept them and how easy is it to obtain them?
Pros and cons of crypto betting
We have already seen the major and provable advantages to betting with cryptocurrencies. Firstly, we have superb protection against fraud, such as identity theft. Crypto relies on the most advanced forms of encryption, which means every single transaction uses unique code and is incredibly secure. Secondly, cryptocurrencies are designed to protect the user's identity and celebrate anonymity, meaning that there is no trail from betting site to bank. Finally, a glance at a casino's payment page shows how fast crypto's transaction times are. With some forms of payment, players must wait up to five days to cash out. However, with crypto, it is instantaneous.
Beware, however. Betting with crypto is not quite the global utopia its champions might claim. The first drawback is its ongoing volatility. While it might mean that your nest egg increases in relative value overnight, the opposite could also be true, reducing the value of winnings or even wiping them out. It can also be harder and longer to liquidize crypto assets than other forms of currency.
Moreover, many countries have banned the use of crypto by their citizens, such as China, Colombia, Egypt, Indonesia, India, Iran, Russia and Turkey. This not only restrict the ability of crypto-friendly casinos to operate in these jurisdictions, it could even lead to the unsuspecting player falling foul of anti-fraud laws. Remember though, this is only the worst case scenario.