Cryptocurrencies such as Bitcoin, Litecoin and Ethereum are offered as a means of payment in many online casinos such as big wins casino and betting providers. Many players rely on digital currencies to process payments quickly, securely and discreetly.
Cryptocurrencies such as Bitcoin, Ethereum and Ripple have become increasingly important as a payment method for online gambling providers without a British license.
We examine the importance of cryptocurrencies for online gambling.
History of Cryptocurrencies in Online Gambling
Bitcoin is the first cryptocurrency, conceived in 2008 by developers under the pseudonym Satoshi Nakamoto. Compared to fiat currencies such as the euro or US dollar, digital currencies are not subject to government supervision and are not monitored by any financial authority.
Bitcoin and many other cryptocurrencies are based on blockchain technology, in which all transactions are recorded. Anyone who wants to trade or pay with digital coins needs their own wallet in which cryptocurrencies are stored and managed.
The introduction of the digital money system by online gambling providers began in the 2010s. The first online casinos and betting providers initially offered their customers Bitcoin as a payment option for deposits and withdrawals. This was followed by other cryptocurrencies such as Litecoin, Ethereum, DOGE and Ripple.
Advantages of Cryptocurrencies in Online Casinos
Payments with cryptocurrencies offer gamblers in online casinos and bookmakers several advantages.
This includes anonymous payments, as no personal data or payment information from your credit card or bank account is transmitted during any transaction. To make payments to a gambling provider, you only need your own wallet address. Many players see this as a better way to protect their privacy.
The speed of the transaction is another advantage, as deposits and withdrawals are made in real time. This is possible because there are no banks or payment service providers involved. Compared to online casino payment methods such as bank transfer, PayPal, Skrill or Neteller, players can have their winnings within a few moments. Otherwise, a waiting time of three to five working days must be taken into account.
Cryptocurrencies on a Laptop & a Smartphone
Cryptocurrencies can be used by gamblers as a payment method on both computers, in the desktop version and via mobile devices.
Gambling providers also offer their customers different payment methods in different countries. This results in restrictions in terms of availability depending on where the player lives. The situation is different with cryptocurrencies, however, as the digital coins can be used globally for payments and gamblers can therefore access them worldwide.
Furthermore, gambling providers do not charge any transaction fees for the use of digital money.
Cryptocurrencies are also allowed to activate bonus promotions, so players can participate in all available bonus offers and do not have to resort to an alternative payment method.
Risks & Hurdles
However, using cryptocurrencies as a payment method also comes with some risks and hurdles. Cryptocurrencies are very volatile, so the value of the respective coin can be subject to strong fluctuations.
Even though blockchain technology is a secure tool for managing and paying for cryptocurrencies, no platform is generally protected from hacker attacks, which can pose a major risk to every player’s crypto holdings. This was demonstrated by a hacker attack on the crypto casino Stake.com last year. Cybercriminals caused damage of around 41 million US dollars.
Payments made using cryptocurrency cannot be reversed. Once the transaction is confirmed, the previous account balance cannot be restored. This also poses a security risk in the event of possible fraud by third parties who have gained access to other people’s wallets.
Popular Cryptocurrencies in Online Gambling
Online casinos and betting providers with cryptocurrencies provide some digital coins for their players. The number of available digital currencies has increased significantly in recent years. However, the most popular cryptocurrencies in the gambling scene include Bitcoin, Litecoin, Ethereum, DOGE and Ripple.
Bitcoin
Since its development in 2008, Bitcoin has been available to the public since 2009. The starting price of Bitcoin in 2009 was just a few cents. In the following years, the cryptocurrency saw a rapid increase in price. At the end of 2017, the value of one Bitcoin was around 20,000 US dollars (18,657 euros).
Bitcoin is the oldest cryptocurrency and is available as a payment method at many gambling providers without a British license.
However, in 2018 and 2019, the price of Bitcoin collapsed and fluctuated between $3,000 (€2,798.55) and $4,000 (€3,731.40). However, Bitcoin reached its all-time high in 2021 with a value of $60,000 (€55,971).
Litecoin
Litecoin is a well-known cryptocurrency that is available as a payment method at numerous gambling providers. The virtual currency was created in October 2011 by Charlie Lee, a former software developer at Google. Compared to Bitcoin, Litecoin aimed to have shorter block generation times (the time it takes to create a coin) and faster transaction times.
Litecoin is a payment alternative to Bitcoin and is provided as an additional payment option by gambling providers without a British license.
The digital currency is now available on numerous crypto exchanges and can be used as a payment method in online casinos and betting providers as well as at many online retailers.
Ethereum
Ethereum is a cryptocurrency developed in 2015 by Vitalik Buterin, a Russian programmer. However, it is not only a digital currency (Ether), but also a platform that, among other things, provides access to financial services and other decentralized markets.
Gambling providers without a British license offer Ethereum as an additional cryptocurrency for deposits and withdrawals.
Along with Bitcoin and Litecoin, Ethereum is one of the most popular cryptocurrencies in online gambling. Many players rely on this virtual currency due to the fast transaction times and the entire Ethereum network.
DOGE
DOGE dates back to 2013 and has a curious history. The cryptocurrency was originally developed by Billy Markus and Jackson Palmer as a parody of Bitcoin. The two developers initially wanted to make fun of the global Bitcoin boom. At that time, it was not foreseeable that DOGE would also develop into one of the most successful and well-known virtual currencies in the following years.
Compared to Bitcoin, Litecoin and Ethereum, DOGE is not found in all online casinos that offer cryptocurrencies. However, it can be observed that more and more gambling providers are integrating the digital coin into their portfolio of payment methods. Therefore, it remains to be seen whether DOGE will be able to catch up with Bitcoin in online gambling in the near future.
XRP from Ripple
Ripple was developed in 2013 by Chris Larsen and Jed McCaleb and works on a different principle than Bitcoin. The provider’s virtual currency (XRP) is not based on blockchain technology, but on the Ripple Protocol Consensus Algorithm (RPCA).
In addition, Ripple offers the possibility of not only using the in-house cryptocurrency XRP, but also transferring fiat currencies and exchanging them directly on the in-house platform. Ripple is therefore a good choice for casino players who want to use not only digital but also classic payment methods for their deposits and withdrawals.
