Cryptocurrency in Online Casinos: Why the Landscape is Always Changing

In 2012, the first cryptocurrency-based online casino was opened and since then some gambling companies have adopted cryptocurrency into their operation as a partnership between the casinos and cryptocurrency.

There are two types of these casinos,  the ones that accept crypto and card as payment and those casinos that are strictly cryptocurrency-based. As for the casinos that accept available cryptocurrency, a quick browse online will alert you to the many online platforms like Ignition crypto casino. Even a quick look at these platforms will give a holistic idea about how crypto-based websites operate, and why is the new generation of gamers so much obsessed with that idea. 

With this being said, we must admit that the landscape for online casinos is consistently changing, and there is always a possibility of new emerging markets and forms of businesses, so let’s explain these changes below. 

New Cryptocurrencies

The sheer amount of altcoins means online casinos will most likely feel a need to keep up with their competitors by providing popular cryptocurrencies available on their sites. In 2022 alone, approximately 5,000 new cryptocurrencies emerged! Considering the ratio of online gambling sites to cryptocurrencies, there is no sign that the demand for cryptocurrencies in online casinos will slow down. This could pose a threat to the industry if all online casinos start to only use crypto because it will alienate consumers who prefer using traditional banking methods.

New technology - Blockchain - Ethereum 2.0

The technology of cryptocurrency including blockchain technology is constantly evolving in order to be upscaled to make online casinos safer. Ethereum 2.0 is a successful upgrade from the original Ethereum blockchain and is linked to changing the online casino landscape because it alters the network’s speed and efficiency which means online transactions become even faster. Ethereum 1.0 and 2.0 are merging together combining the new and old features of the network to ensure a smooth transition for users. The Eth. 2.0 upgrade will make major changes to cryptocurrency, including proof of stake.

Proof of stake is a consensus mechanism that is used to achieve a distributed consensus. Those who have locked up cryptocurrency assets are chosen randomly to propose new blocks for transactions in exchange for rewards. If they break the rules, their assets are taken away. The upgrade will alter the way online casinos operate because it will erase their network traffic and allow multiple financial interactions at once.

Decentralized Finance (DeFi)

Decentralized finance (DeFi)  has been recognizable since 2017. DeFi uses blockchain technology to offer financial services without interference. It enables people to lend and borrow without intervention from other bodies like banks. In casinos, customers can earn rewards and earn a stake in their cryptocurrency holdings securely through it. 

Uniswap

DeFi platform Uniswap is a cryptocurrency exchange company also a part of the Ethereum blockchain. It is made possible by smart contracts which make decentralised exchanges functional. Smart contracts work as a mediator between people and allow them to swap tokens with one another.

For online casinos, applications like Uniswap are not only changing the way trading of crypto occurs but of in-game assets also. Lots of video game franchises have their own buy and trade sites, like Nookazon for Animal Crossing: New Horizons.

 If used correctly, online casinos can create a market to buy, sell and trade in-game digital assets from their sites. If adopted by all cryptocurrency casinos, the number of cryptocurrency-based games may increase, as well as repeat customers to the casino because they are offering users new streams of revenue. 

Changing Regulations for Cryptocurrency

As an alternative source of income, the original appeal of cryptocurrency was that it was unregulated and instantaneous. Even so, because of its worldwide accessibility, governments have felt the need to put in place rules and guidelines that need to be considered when investing in cryptocurrency online. 

If we look at the UK,  the UK Gambling Act does not have a section that pertains to the use of cryptocurrencies, but under UK law cryptocurrency casinos in the UK must have a license and registration to proceed. Although the Financial Conduct Authority (FCA) has issued guidance and warnings about investing and using cryptocurrency. 

There are still core recommendations when it comes to how online casinos involving cryptocurrency should be run regardless of the country. Recommendations include: having appropriate licensing, protecting data and privacy, and ensuring all games are fair. Recently, the UK passed a financial reform bill to regulate cryptocurrency assets. The Finacial Services and Markets Act 2023 means cryptocurrency assets are being recognized as legitimate assets.

This is significant in the UK cryptocurrency and online casino market because it means the UK has the potential to be a hub for the business of crypto and for online casinos to grow freely and legally in UK law. With the promise of protection in place, cryptocurrency assets in the future will feel as legitimate as land, vehicles, or property.

The Future of Cryptocurrency in online casinos

The future of cryptocurrency in online casinos looks promising, but it is uncertain. Opinions of financial bodies and governments have the potential to damage the online casino industry if further laws and strict regulations are put in place restricting cryptocurrency, its worth and availability may decrease.

Moving forward, keeping an eye on the industry for crucial updates is imperative for regular players. Following the rules of their country and listening to guidance should be done so they can keep their peace of mind.