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It seems that everyone is talking about it recently, but what exactly is a cryptocurrency and how can you use it? By definition, a cryptocurrency is a digital currency that uses digital encryption techniques to produce new currency units and verify transactions independent of a central bank but we don’t really need to know that stuff to be able to use crypto. In this introduction, then, we tell you everything you need to know before you start playing casino games with cryptos online.
More information about Cryptocurrencies
Let's start at the beginning. Cryptocurrencies come as a byproduct of another technological discovery – one we've all probably heard of that goes by the name of Bitcoin. The inventor of Bitcoin is Satoshi Nakamoto (a pseudonym) and no one knows who he really is. Bitcoin was intended to be a new electronic payment system that uses a peer-to-peer network to address the contemporary problem of “double spending,” Nakamoto said in the original explanation of Bitcoin. Double-spending is a problem when it comes to digital cash as the very same “digital token” could potentially be copied or multiplied and spent several times. Bitcoin, therefore, introduced the so-called “blockchain technology” which can verify every single transaction in the network to avoid this flaw and make the money-flow incredibly secure and transparent.
Try to imagine what your bank account looks like. Well, actually, today's money is not a pile of cash or gold. Instead, it is nothing more than a number in a database that can only be changed under certain circumstances. Cryptocurrencies are exactly the same. Like any form of money, this must be verified in some kind of database, where you arrive at a certain balance and a number of transactions. With traditional money (known as Fiat currencies), this database is located at an institution such as a country’s central bank. With cryptocurrency, it is decentralized and shared all over the world in an encrypted manner and verified through the blockchain.
Before you can play at an online casino with Bitcoin or any other cryptocurrency, you must first obtain these virtual coins. You do this by exchanging your local currency into a certain number of the desired cryptocurrency. The most common way to approach this is to sign up for one of the many crypto exchanges online. You can fund your account with your credit card or a wire transfer, for example. Then you can exchange the Fiat currency for an equivalent value in crypto. Once you obtain the digital currency, you can send it to any wallet you want, including your online casino account. Simple, right? Well, there’s a couple of more steps to go first!
Typically, you can find your personal wallet address in the cashier of your casino account. You need to copy and paste this address to your wallet where you are currently holding your coins, select the amount you would like to send, and confirm the transaction. Alternatively, this can be done by scanning the provided QR-code in some cases. Your funds should arrive in a matter of seconds or a few minutes at worst, depending on your network speed. Make sure that you are only sending the intended cryptocurrencies to a specific wallet address. For example, you can’t send Ethereum to a Bitcoin address or vice versa.
If you would like to withdraw your winnings from your casino account, you basically have to follow similar steps. Enter the address of your crypto wallet at the casino's cashier and specify how much you would like to withdraw. After the payments department has approved your cash out, it should only take a few moments for your money to arrive. You should always keep in mind that most online casinos keep Fiat currencies and cryptocurrencies strictly separated due to regulatory requirements. As a result, you will always have to withdraw your cryptos back to the same wallet you used to make the deposit in the first place. In most cases, therefore, it is not possible to withdraw to any other payment methods such as credit cards or bank accounts.
When you are playing online at a crypto casino, you have to differentiate between two types.
First, you have special crypto casinos that run the games themselves on a blockchain like Ethereum. Once you place a bet on a game, the blockchain verifies your bet and randomly calculates the outcome – i.e., whether you have won or lost. The casino has absolutely no influence on this. This is great news for players, as the algorithm of the blockchain can not be manipulated and fair games are guaranteed for all. The big drawback of this type of casino is that the game selection is often limited to very basic games.
The other option is online casinos that offer cryptocurrencies as a method of payment. Here, you can play almost all games with cryptos just like with any other currency like euros or US dollars. The cryptocurrency is merely used as a vehicle to transfer funds to and from the casino. The random number generators of the games are completely independent of this. They are usually designed by the game developers and cannot be influenced by the casino either. However, you need to be sure that both the game developer and the online casino are operating under a trustworthy jurisdiction. In this way, you know that all random number generators are certified and that the results of your games are truly random. The biggest advantage of this type of casino is the incredible selection of games. You can usually choose between thousands of slots, table games, and live dealer games.
Playing online with cryptos has a lot of advantages. You can benefit from quick transactions for deposits and withdrawals, it can be fully anonymous under the right circumstances, and the transaction fees are low. But it also comes with some downsides that you should take into consideration. Dealing with cryptos can be a daunting task, especially if you are new to the subject. It is not as self-explanatory as a credit card deposit and has certain risks if it is not handled correctly. Furthermore, the value of cryptocurrencies can fluctuate immensely and is not as stable as other Fiat currencies. For that reason, we only recommend playing at crypto casinos to players that are already experienced in using this relatively new technology.