What Is A Decentralized Casino?
Before getting into the technical details of decentralized casino advantages, let’s take a moment to explain the workings of such platforms. Their main feature is that they use the blockchain, removing all need for a central authority or other financial or regulatory middlemen.
The three main elements that characterize all De-Fi casinos are blockchain technology, the use of cryptocurrencies and actual decentralization. Let’s take a look at how these three aspects come together to offer a superb gambling experience to players seeking freedom from the constraints of traditional fiat gambling sites.
Blockchain Technology
Decentralized casinos are built using blockchain technology, which is a distributed ledger that securely records transactions across a network of computers. The blockchain is built using smart contracts which ensure a high level of transparency.
Decentralized casinos are built using blockchain technology, which is a distributed ledger that securely records transactions across a network of computers.
If you’re wondering what a smart contract is, this is like a computer code that guarantees all transactions leave a verifiable digital trail which is secure and cannot be changed. The smart contract doesn’t need any third parties to work as it’s triggered by principles embedded within the coding - hence the term decentralization.
To use a practical example, let’s say you choose a credit card option when making a deposit at an online casino. For the transaction to be completed you will need the intervention of a traditional bank - the centralized middleman.
On the other hand, when you’re using cryptos the transaction is triggered by the smart contract itself and needs no other middleman to be completed. All casino transactions like deposits and payouts are automated and need no centralized authorities like banks, gambling regulators or other financial institutions are involved, thus the term ‘decentralized casino’.
Cryptocurrencies
The list of decentralized casino advantages includes the fact that they all accept multiple types of cryptocurrencies without any exception. Originally, De-Fi sites were created with Bitcoin gambling in mind, but today the top ones all accept different types of alt-coins.
The use of cryptos is one of the aspects that enforces the anonymity of decentralized casinos, making them very popular with players who value privacy. Cutting out all financial middlemen means that you don’t need to divulge your gambling activity to anyone, least of all your bank manager.
Decentralization
Decentralized casinos operate without a central governing body, using a network of nodes to validate transactions and game outcomes. This allows the platform to operate independently of gambling regulators, taxation structures and other third-party authorities. Some decentralized sites even allow users to participate in governance decisions through voting mechanisms, making the platform more democratic.
Decentralized casinos operate without a central governing body, using a network of nodes to validate transactions and game outcomes.
What Are The Benefits Of Crypto Casinos?
So why are crypto casinos such a big deal? The number of decentralized casino advantages are many, and range from practical ones like fast and easy cashouts to ideological ones - such as the fact that they operate independently of any central authorities.
Let’s take a look at some of the reasons players are increasingly turning to De-Fi gambling platforms as a better alternative to fiat casinos.
Privacy
The vast majority of players are fed up with having to share an inordinate amount of personal information with fiat gambling sites and with traditional banking providers.
Regular casino sites require a lot of information from the very start when you’re registering, asking not only for your actual name and e-mail address but also for your date of birth, physical address, telephone number.
When you want to withdraw winnings you will also be asked to provide proof of your identity via a document, proof of address via a utility bill and also proof of your source of income. This is a lot of personal information to ask for, and not all of us are necessarily comfortable exposing all these details to a gambling platform.
Added to this, there’s always a risk that this information is shared with third parties or is accessed maliciously by unauthorized parties.
On the other hand, for sites that follow a No KYC policy, the list of decentralized casino advantages includes full anonymity. You won’t be asked for any of these details, thus your data encounters zero risk and you can play at the casino without revealing your identity.
...the list of decentralized casino advantages includes full anonymity. You won’t be asked for any of these details, thus your data encounters zero risk and you can play at the casino without revealing your identity.
Some De-Fi casinos let you sign up with a username and password, while others - like Bitcasino.io, let you connect your crypto wallet directly so you don’t even need to input any personal data. Stake is one such site, offering sign-ups via Twitch, Facebook and Google.
When you’re depositing or withdrawing cryptos you won’t need to share any fiat financial information and all your transactions - while being trackable via wallet - cannot be traced personally to you. Thus, keeping to the same example of Bitcasino.io, whether you deposit using BTC, Litecoin, Tether or any of the other alt coins available, you will enjoy 100% privacy for all transactions.
Transparency And Security
Every transaction in a decentralized casino is recorded on a public blockchain. This ledger is immutable and accessible to anyone via open-source technology, ensuring that all actions are transparent and cannot be altered after a transaction has been completed.
Moreover, blockchain casinos benefit from automated transactions that self-trigger as soon as certain conditions within the coding are met. They don’t require the intervention of a third party, so there is no risk of human error.
Fiat casinos cannot offer this same level of transparency because they are built on centralized entities that control the structure of the platform. Neither is the platform’s code accessible for independent verification, so this element of implicit trust is missing.
No KYC Controls
Most fiat casinos operate with a gambling license that comes with very strict requirements. Regulators like the UK Gambling Commission, or the Malta Gaming Authority, impose Know Your Customer (KYC) processes upon online casinos in an effort to control fraud and money-laundering. However, these processes can be tedious, time-consuming and invasive for players who are not up to anything illegal and simply want to enjoy the casino games with the least interference possible.
Decentralized casinos are not subject to the rules of such authorities and can therefore offer a smoother and less invasive experience to players in terms of crypto payments and cashouts (this applies to the large number of those that operate without a license not asking for any KYC requirements).
This makes a huge difference particularly when it comes to withdrawing winnings, as fiat casinos will impose a whole lot of bureaucracy and paperwork. De-Fi sites like SpinBet, on the other hand, are in a position to offer instant cashouts.
Flexible Geo-Restrictions
Because they operate within the purview of central authorities and traditional banking structures, fiat casinos are affected by the laws of the territories within which they operate.
Thus, for example, a regular online casino that welcomes players from the UK will have to pay the UK government 21% tax on all the revenue made from these players. Failure to do so would result in the removal of its license and sanctions such as fines.
Although licensed crypto casinos still impose geo-restrictions due to the demands imposed by their license, you will also find many crypto casinos that are borderless. These operate independently of governments and the structure imposed by fiat currencies.Thus, sites like JustBit can afford to be more flexible in this regard, often closing an eye when it comes to players using VPNs to gamble because they’re not bound by the restrictions of the specific country. The lack of KYC processes facilitates this, as there’s no need for proof of identity at any stage.
Provably Fair Games
Fiat casinos depend on your trust when it comes to proving that games are fair and that wins are truly randomly generated. Due to the use of proprietary RNGs that determine game outcome, you have no way of ascertaining the level of fairness yourself.
Granted, these RNGs are typically certified by external auditors, but this means that you must rely on trustworthy software providers that are tried and tested. New, groundbreaking games are few and far between at fiat casinos.
Decentralized sites, however, offer you the option to test the games’ fairness for yourself. This has made it easier for altcoin gambling websites to stay on the cutting-edge of trends and technologies when it comes to game selection. This is why the hottest games - such as crash games - all originated at crypto casinos.
Decentralized casino advantages include the provision of tools that check the integrity of game results by comparing data inputs with the outcomes generated by the casino, proving that games are not manipulated. These types of games are usually clearly marked within the Provably Fair Games category - SpinBet, for example, offers crypto games like Aviator, Goal, Dice, Fortune Wheel and others, which most fiat casinos don’t provide.
You will also find the classics from popular providers, of course, so you’re getting the best of both worlds in terms of gameplay.
Resistant To Censorship
Picture this: you find the perfect online casino, you’re vibing with the games, the processes, the design when bam! The site’s offline for some purely technical license violation. This isn’t a problem you’re likely to encounter with crypto casinos. The whole point of being independent of centralized authorities is that they don’t get to dictate when you’re operational or decide to pull the plug for some bureaucratic violation.
Operating on the blockchain comes with the advantage that the platform is maintained by a network of nodes spread across the globe. Even if some nodes are taken down, the network continues to function, making it extremely resilient to censorship attempts. A University of York research paper confirmed this, stating that the distributed nature of De-Fi casinos makes them “impossible” to shut down.
Low Fees & Fast Transactions
By cutting out the middleman, decentralized casinos are in a position to offer very low transaction fees when buying crypto, and lightning fast withdrawals. These casinos tend to employ a system that favors the player, rather than viewing transactions as another potential source of revenue.
...decentralized casinos are in a position to offer very low transaction fees when buying crypto, and lightning fast withdrawals.
Betplay.io, for instance, adapts its fees according to market exchange rates - if you’re cashing out or exchanging when fees are very low, you will benefit from this without having to deal with a casino mark-up. Other sites like Stake absorb the fees themselves.
The same applies to the withdrawal process, where there’s no banking bureaucracy brought into play. The moment you request a cashout, the smart contract will trigger its execution and kick off the transaction, allowing sites like Cloudbet to guarantee cashouts in under three minutes. Compared to the waiting time of 3 to 5 working days required for bank withdrawals, the speed of withdrawals at cryptocasinos is gold.
Are Crypto Casinos Better Than Fiat Casinos?
Crypto casinos are better than fiat casinos for those players who value certain features like anonymity, transparency and centralization. These all translate into tangible benefits for players, such as the ones below.
Crypto casinos are better than fiat casinos for those players who value certain features like anonymity, transparency and centralization.
This is not to say that everything’s perfect. As with everything else, there are disadvantages to using decentralized casinos.
Ultimately, it’s a matter of weighing everything to figure out what works for your specific gambling style, while bearing in mind that as the industry continues to mature some of the disadvantages are already being tackled.