Bitcoin Casinos : How they Work and Offer Rewards
Bitcoin Casinos are not new phenomenon but it is gaining more and more with the increase in crypto-currency deals.
The bitcoin and its popularity, as the digital currency, has made a new economy to flourish in parallel to the pre-existing traditional money-based economy. While bitcoin transactions continue to gain accreditation, they have also enabled a new play area for gambling, gaming and lotteries through online bitcoin casinos.
What are bitcoin casinos?
Bitcoin is the most exciting and popular digital currency or cryptocurrency. Online casinos transact only in cryptocurrency, bitcoins, while others offer bitcoin as the new currency of transaction, in addition to operations in traditional currencies like USD.
There are increasing numbers of online casinos which offer money based games and gambling in bitcoin currency. These casinos operate from various places all over the globe, though they are supposed to be subject to national laws. Through bitcoin transactions, these casinos offer a large variety of options for players to bet their bitcoin money on:
- casino games
- gambling games
- sports-based betting
- spread betting
- online lotteries
Popular bitcoin casinos
How bitcoin casinos operate
Software remains at the heart of all online gambling or gaming business, and same holds for bitcoin casinos. The popular bitcoin casinos, mostly with large user bases, run their gaming with self-developed and custom made software. Other smaller players use rented or purchased versions, which might be customized by adding a few unique features to the game.
The software runs and conducts the game with minimal or zero human intervention. For games needing human players, the software plays the role of the table dealer (actually performing the game). These casinos face the challenge due to the digital nature of their business, convincing the users about the fairness of their operations. Bitcoin casinos mostly attempt to establish trust by openly disclosing how the software algorithms work. It’s more of a peer reference that works on the uniqueness of their offering in the casino games, for the rest.
Poker is the most exciting and popular game for bitcoin casinos. In contrast, a lot of other exciting games, lotteries and different variations of popular games exist (and continue to get invented).
Why they are gaining popularity
Anonymity remains the most significant advantage for bitcoin casino users and for that matter, even for the founder of bitcoin, the pseudonymous Satoshi Nakamoto and for any bitcoin transaction.
Most bitcoin casino sites provide zero transaction fees with unlimited free daily transactions. Traditional currency based casinos offer to set limits and transaction fees.
The online digital nature of the business which goes round the clock is only possible because of the easy availability and global access of players in large numbers.
As online games are widely beyond the purview and control of authorities, many online games have been customized with tweaks in the rules and regulations of the game. These variations are not allowed legally in traditional currency based online casinos, and this has been a significant reason for the popularity of bitcoin casinos.
Why they are under surveillance
Online traditional casinos transacting in traditional currencies have defined rules and regulations. Payments in traditional currencies ensure tracking and identifying individual players, dealers and casinos operators. The similar is not the case with bitcoin casinos.
Because bitcoin transactions are purely digital and computerized, audit and verification become a challenge. E.g., in a virtual card game, what is the guarantee that the cards have been shuffled and distributed relatively? Additionally, if the player’s anonymity is maintained as he or she pays anonymously through digital currency, fair business practices become questionable.
Many of these casinos require minimal user details (quite often limited to only email and login-name), no age verification, no location check or other information.
Gambling is not allowed in many of the countries across the globe, and bitcoin casinos make it further challenging to regulate and control it at the global level.
All operational methods stated above, prove a challenge for authorities, as a new parallel economy is taking shape. While digital currency based systems may be cited for their advantages, casino-based gambling is undoubtedly a challenge at multiple grounds.
Because of the nature of bitcoin transactions and challenges listed above, running these casinos is illegal in the US. Mostly all the legal bitcoin online casinos are incorporated outside of the US. Interested users from the world including a significant user base from the US, transact on these online bitcoin sites anonymously, posing a big challenge for legal authorities to control, regularize and legalize the transactions. Lack of full and open information on such anonymity-based business poses a challenge to collecting the type of data that would be needed to enforce and implement rules.
The impact on bitcoin transactions
Due to anonymity and the lack of publicly available information about bitcoin, it isn’t easy to assess the details and impact of bitcoin casinos on bitcoin itself.
The reality remains that online bitcoin casinos are getting more and more transactions with a steady growth rate since 2012 till date. This has fuelled the usage of bitcoins.
The Bottom Line
Casino gambling, whether based on conventional traditional currency transactions or anonymous digital currency transactions, has always been a debated topic on ethical and legal grounds. The complexity of bitcoin transactions increases the trading and operations of bitcoin casinos challenges. While it is still interesting to get carried away with easy money making options, users should keep in mind the legal aspects, challenges and risk areas.