Gambling and cryptocurrency are either a match made in heaven, or a disaster waiting to happen.
Mainstream curiosity surrounding cryptocurrency has ebbed and flowed in recent years, peaking with a colossal rise in the price of Bitcoin in 2017. However, in recent weeks, the public gaze has diverted back towards crypto as Bitcoin rallies once more. At the time of writing, the world’s most (in)famous cryptocurrency is worth almost $20,000 per coin — a historic all-time high — up from circa $400 just five years previous. That’s a 50x increase in a half decade, gains that traditional stockbrokers and fund managers could only dream of. People have always been attracted to “get rich quick” propositions, which is exactly what Bitcoin represents for many whose interest has been piqued. Indeed, a select few have been made very wealthy by the phenomenon. And it could be said that this same spirit is what has also drawn us to the pursuit of gambling since time immemorial: the ability to put it all on red and potentially walk away with double the money. Crypto investors typically enter the game with profit in mind, whereas most gamblers are aware the odds are stacked in favor of the house, but the overlap in attitudes to risk suggests a kinship between the two. In this context, it’s easy to understand the emergence of hundreds of crypto casinos over the past few years, which allow customers to place bets and withdraw winnings in cryptocurrency as opposed to regular fiat money (e.g. dollars, pounds, euros etc.). Using cryptocurrency, punters can preserve their financial privacy and can also be sure the games are not rigged, because the betting logic is stored on a blockchain — the underlying technology. However, this new variety of casino also embodies many of the criticisms levelled at the cryptocurrency industry in microcosm: they’re experimental, highly risky and loosely regulated. So are casinos and cryptocurrency a match made in heaven, or a disaster waiting to happen? Businesses that have sought to apply blockchain (which can be thought of as a distributed database of transactions) to a gambling context typically reel off a familiar series of ostensible benefits. To understand these fully, it’s important to grasp the basic qualities of a public blockchain: While these inherent traits open various doors, the transparency built into blockchain systems is likely to be an especially attractive proposition for gamblers, who can be certain that the code underpinning casino games is unbiased and programmed as it should be. “This means players can verify that the outcomes of games have been fair in real time and haven’t been manipulated by the casino or a bookmaker,” explained Lars Rensing, CEO at enterprise blockchain firm Protokol. “The technology provides a permanent record of verifiable unchangeable transactions, meaning that those businesses using blockchain can demonstrate a fair system for both placing and claiming bets.” Many crypto casinos are also built on top of the Ethereum blockchain — known as the world computer — which offers the ability to code in “smart contracts”, a type of agreement that is settled automatically when certain criteria are met.
