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Is Cryptocurrency the Future of Online Gambling?


The past twelve months have been something of a reckoning for the cryptocurrency industry; one minute we had Three Arrows Capital talking of “supercycles”, predicting that the only way forward now was up. And yet seemingly, in the blink of an eye, everything changed; the biggest bear market we have ever seen hit the industry with the force of a dinosaur-killing asteroid, and market analysts are still debating whether the worst is over.

The Task with Crypto

In the earliest days of Bitcoin, people’s main reservation about this new form of money was its lack of utility. Say what you will about the Silk Road and the dark web, but without them, I would estimate that on the balance of probabilities Bitcoin and all of its copycats would have long since disappeared; a mere footnote in the history of the common man’s attempt to achieve financial freedom from the banks.
When online gambling websites began to take an interest in cryptocurrency, however, it finally opened a door to a more legitimate market where this technology could not just assist; it could revolutionize. The earliest bitcoin-based casinos were simple affairs, such as SatoshiDIce; barely even worth a footnote on the premier industry analysis sites such as demo slots.

The First Bitcoin Casinos

Despite their shortcomings, early bitcoin-based casinos such as SatoshiDIce – later MegaDice - did have several amazing things going for them. Firstly, the mathematics that underpins blockchain technology allows for the result of the next game round to be known in advance, but there is no mechanism which can reverse this functionality to enable cheating.
The result? Bitcoin-based casinos are probably fair, as the outcome of each round provides the missing variables necessary to plug into an incredibly complex equation – If everything checks out, your results were fair. There is no cheating this, no denying it, and no arguing against it, and it seems likely that similar technology will be implemented into regular online casinos eventually – finally dispelling the myth that online players are somehow getting a poor deal.

Depositing and Withdrawing Using Bitcoin

If you have ever heard a cryptocurrency enthusiast extolling the virtues of the superior speed of blockchain-based transactions, I am sorry to say that I have bad news for you. Different blockchains have different target times for producing new blocks; in the case of Bitcoin, Satoshi designed the system such that the difficulty of the cryptographical puzzle which secures the blockchain should always take roughly ten minutes to complete.
This isn’t an exact science, however; blocks are occasionally discovered in mere seconds, whilst others may take up to an hour to be confirmed by the network. Other Blockchains such as Litecoin aim to produce blocks in just a couple of minutes, but there is an inherent tradeoff between the time taken to solve the puzzle and the security of t Blockchain.
Amusingly, one so-called Bitcoin/Blockchain developer actually released an altcoin with a one-second block time several years and somehow failed to understand why the entire pool of tokens ended up bouncing from, one single wallet to another for the next week. The currency was soon discontinued.

How Bitcoin Casinos & Exchanges Avoid Such Limitations

The solution? Major exchanges and betting sites are required to keep large amounts of liquidity on standby just in case it is required if there is a long delay in block-processing times. This is why it appears to be instant when you purchase new crypto from Coinbase, but on the back end, that transaction will likely take at least 20 minutes to complete. Ironically then, it is actually adding new coins to the system which causes delays in crypto – your deposit may take a while to appear, but your withdrawals are likely to be instant. Sounds Good to me!