What Is Special About Crypto Casinos?
By now, you have likely heard of the cryptocurrency revolution. As more stores and services adopt the various currencies, their spread and value have only continued to increase. Yet what is CryptoCurrency and how does it impact online gambling?
This sounds like techno-wizardry, but after we break down what each is, you'll see it is still techno-wizardry, but wizardry you can quickly adopt and wield yourself. Then we'll explore how it impacts online gambling.
- What is cryptocurrency?
- What benefits does cryptocurrency have over state-sponsored currencies?
- How does this impact online gambling?
What is Cryptocurrency?
In an economic system what Austrian economics, the currency is an economic tool that facilitates trade. Often called "capital," it has an agreed-upon value that other assets and services are then priced in for the purposes of exchange. These systems are called "capitalism" or if you want a rougher translation, "a system of capital”.
Currencies derive their value on one of two mechanisms. The first that is not applicable here is a reserve standard where one can trade the currency in a commodity. The United States and most European nations at one point enjoyed the Gold Standard. Asian countries, by contrast, enjoyed what was known as the Rice Standard. Where you could bring your money into a central repository and exchange it for rice the government collected as part of taxes.
The second and applicable here is based on scarcity and acceptance. When a currency does not have a standard, it is valued solely on public acceptance of it as a currency. Rendering its value based on the amount of currency available compared to the demand for the currency.
Crypto, a set of currencies based on blockchain technology, derives its value from the simple reality that there will only ever be X amount of the currency and never any more. This scarcity as more coins are "mined" drives value as demand increases. However, cryptocurrencies without a hard limit of the total supply exist, too.
What Benefits Does Cryptocurrency Have Over State-sponsored Currencies?
There will only ever be a certain amount of cryptocurrency. That value is known ahead of time and doesn't change unless the algorithm the currency is based upon is expanded. This has only happened a few times with less reputable currencies that were nearly promptly abandoned and are unlikely to occur with Bitcoin, Ethereum, or Litecoin.
There are already thousands of cryptocurrencies in existence, however, the market is strongly dominated by Bitcoin (BTC). This currency is regarded as gold and most other currencies are usually priced against BTC and USD.
There is volatility in the market as various banking institutions and financial powers attempt to drive down the value of one coin or another through short sales and other financial trickery. Still, the value index is visible to everyone on an exchange market.
At first, you may think you don't want to associate a currency with volatility. That is a reasonable fear, but you have to understand every currency in the world has volatility. The only difference is that it is difficult for an average person to track and observe. Further, as more money is printed, the purchasing power decreases and will never increase.
Once the player decreases the value of the coin stops, the value skyrockets back up as market forces through increased demand determine its value. Thus ownership of crypto is in one part no different from owning cash and, on the other hand, has the benefit of owning coins with a limited supply. The value over time only goes up.
A final advantage to crypto is the currency is not controlled by a centralized force. No one can steal your crypto as the entire network agrees through the underlying software that you own that currency. This technology is being expanded to other areas such as land ownership in some countries, so you can rest assured while it is complex, it is guaranteed.
Were someone to attempt to hijack the currency, the entire network would be aware of it long before they ever were successful in their venture. Rendering crypto safer to own than having gold in Fort Knox or the New York Exchange.
How Does This Impact Online Gambling?
As other businesses adopt cryptocurrencies, so too are online casinos. A list of crypto casinos is available online, with some going so far as to refuse even to accept regular currencies. Like other online casinos, these institutions are heavily regulated by national laws but operate with cryptocurrency instead of more traditional currencies.
If you've ever done online gambling, you know how the process works with regular currencies. You deposit money into your account and then enjoy your preferred game. The process with cryptocurrencies is mostly the same, but with a few extra steps.
Your first step will be to set a wallet. A wallet is a database that stores your crypto keys and connects to the blockchain. Now there are four ways to do this. First, you can have a portable drive that contains your wallet. If it gets broken, you are out of luck. Another physical option is a paper wallet. Also, you can have one on your computer, or you can have an online wallet.
You can get an online wallet from your exchange provider, or you can establish an account with one of the dominant companies. From there, you transfer the money to the casino's coin address who stores the value on your account on their service. Do note during the exchange, a small portion of the amount is lost through mining.
Mining is the process where miners validate and confirm the transaction. An essential part of the process similar to a transaction tax. This mechanism is what keeps your currency safe and ensures the crypto goes to the proper location.
From there, you gamble as you usually would and enjoy the crypto revolution.