The popularity of bitcoin as an international, digital currency has enabled a new economy to flourish in parallel to the existing traditional currency-based economy. While cryptocurrencies and bitcoin transactions continue to gain popularity, they have also enabled a new online arena for gambling, gaming, and lotteries through something called a bitcoin casino.
What Are Bitcoin Casinos?
For those unfamiliar with bitcoins, bitcoin is the most popular digital currency based on something called blockchain technology. A few online casinos transact only in bitcoins, while others offer bitcoin as an additional currency of transaction, in addition to transactions in traditional currencies like the U.S. dollar.
There are growing numbers of online casinos that offer gambling and money-based games in bitcoin currency. Bitcoin casinos operate all over the globe, though they are supposed to be subject to local laws. Through bitcoin transactions, these casinos offer a wide variety of options for players to bet their bitcoin money on a variety of games, including traditional casino games, gambling games, sports-based betting, online lotteries, and spread betting.
Poker is the most popular game for bitcoin casinos, while a lot of other interesting games, lotteries, and variations of popular games exist (and continue to get invented).
Why Bitcoin Casinos Are Gaining Popularity
Anonymity remains the biggest advantage for bitcoin casino users, and for that matter, for any bitcoin transaction and even the founder of bitcoin, the pseudonymous Satoshi Nakamoto.
Most bitcoin casino sites offer zero transaction fees with unlimited free daily transactions, whereas traditional currency based casinos have set limits and transaction fees. The online digital nature of this business enables global access and easy availability of players in large numbers, around the clock.
Since online games are largely beyond the purview and control of authorities, many online games have been customized with tweaks in the rules of the game. Such variations are not allowed legally in traditional currency-based online casinos, and this has been a major reason for the popularity of bitcoin casinos.
Why Bitcoin Casinos Are Under the Microscope
Traditional online casinos transacting in traditional currencies have defined regulations. Payments in traditional currencies enable tracking and identifying individual players, dealers as well as casinos operators. The same is not the case with bitcoin casinos.
Since bitcoin transactions are purely digital, audit and verification become a challenge. For example, in an online card game, what is the guarantee that the cards have been shuffled and distributed fairly? Additionally, if the player’s anonymity is maintained because they pay anonymously through digital currency, fair business practices become even more questionable.
A lot of bitcoin casinos require minimal user details (quite often limited to only email and login-name), no age verification, no location check, or other details.
Gambling is not allowed in lots of countries across the globe, and bitcoin casinos make it even more difficult to regulate and control at a global level.
All the above operational methods prove a challenge for authorities, as a new parallel economy is taking shape. Although digital currency-based systems may be cited for their advantages, casino-based gambling is surely a challenge at multiple levels.
Legal Aspects of Bitcoin Casinos
Due to the nature of bitcoin transactions and challenges listed above, running bitcoin casinos is illegal in the U.S. Most of the legally known bitcoin casinos are incorporated outside of the U.S. Interested users from all over the world (including a significant user base from the U.S.) transact on these bitcoin sites anonymously, posing a big challenge for authorities to regularize, control, and legalize the transactions. Lack of open information on such anonymity-based businesses poses a challenge to gathering the type of data that would be needed to enforce rules.
Impact of Bitcoin Casinos on Bitcoin Transactions
Due to the lack of publicly available information about bitcoin, it is difficult to assess the details and impact of bitcoin casinos on bitcoin itself. Based on some limited information available, it is understood that the “April 2012 launch of gaming site SatoshiDice.com was sufficient to boost the total number of daily bitcoin transactions nearly five-fold.” This indicates how the anonymous world is keen on gambling.
The reality remains that bitcoin casinos are getting more and more transactions with a steady growth rate since 2012. This has further fuelled the usage of bitcoins.
The Bottom Line
Casino gambling, whether based on conventional currency transactions or anonymous digital currency transactions, has always been a debated topic on ethical grounds. Add to it the complexity of bitcoin transactions, and the operations of bitcoin casinos become increasingly challenging. While it is always exciting to get carried away with easy money making options, users should keep in mind the legal aspects, challenges, and risks.
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