Cryptocurrency casinos are web applications that use cryptocurrencies to facilitate online gambling, and most are designed to guarantee true randomness for the players while leveraging the safety and (partial) anonymity of cryptocurrency. Because cryptocurrencies do not discriminate against their holders or recipients, and can be programmed to automatically move between crypto wallets when the right conditions are met, they are perfect for use in online gambling and betting apps.
It is well-known by now that all real-world casinos have to operate with a ‘house edge,’ which is required to pay for the overhead expenses of running the casino. This effectively guarantees that players will always lose more than they win if they keep playing long enough. Online casinos don’t have the same overhead expenses as physical casinos, thanks to not needing to budget for maintenance, wages, electrical bills, or property taxes. However, online casinos have a different problem – they have to securely process and protect their players’ banking information, and they have to follow strict KYC regulations or face lawsuits as illegal gambling apps. Online casinos therefore must gather and store personally identifiable information about all their customers, which carries the risk of data leaks that could harm their customers.
That’s where cryptocurrency bypasses all of these issues, for better and for worse. According to The Crypto Updates, crypto casinos are safer than real casinos because they allow players to retain their anonymity and provide peace of mind that players’ banking or contact information won’t be leaked from the casino’s database, and that players’ banking institutions cannot intervene in their choice to gamble. Crypto casinos also don’t need to maintain a business account or any payment channels, as cryptocurrency is simultaneously its own account and payment channel, and is incapable of discriminating against its sender or its recipient. Crypto casinos can also be run automatically without any profit margins using cryptocurrency and blockchain smart contracts, allowing them to provide fair odds of winning or losing for their players, as the only expense required to operate them is the cost of the web server that hosts the casino’s website and the bot managing its crypto wallets.
Crypto Casinos Are Fairer And More Transparent
Because a crypto casino requires very little overhead cost and maintenance, its creator can afford to make its games truly fair by providing genuine randomness. In contrast, real-world casinos jealously guard the algorithms that run slot machines, and will intervene when a player is winning too much at card games. Also, because cryptocurrency is the only method of value-exchange, it is much easier and safer to cash out crypto gains than it is to withdraw money to a bank account, as banks may take issue with their customers’ gambling activities and could freeze or shut down their account without warning or explanation.
However, like most things in blockchain technology, crypto casinos run into regulatory issues. According to BetAndBeat, online casinos must enforce KYC (Know Your Customer) regulations to stop underage gambling, addictive gambling, and money laundering. However, crypto casinos may not enforce KYC regulations due to financial constraints or because their creators’ jurisdiction does not require them, and bringing such casinos into compliance with regulations is very difficult. Until blockchain identity systems or ID NFTs are used, there will be no safe way to enforce KYC regulations for automated crypto casinos without risking a leak of customers’ information.
Crypto casinos are better than real casinos because they can guarantee fair outcomes for players, protect players’ identities, and provide a safe and secure way to send and receive money and winnings. Because they are entirely online and use cryptocurrencies, their overhead expenses are limited to the monthly cost of keeping a website and server script running, and they can operate autonomously. However, crypto casinos run into regulatory issues that can lead to enforcement actions, as many offshore crypto casinos do not follow American KYC regulations, which means underage players and gambling addicts can easily and illegally access cryptocurrency casinos.