Top Reasons Why You Shouldn’t Use Cryptocurrency For Gambling

Posted: April 8, 2024

Updated: April 8, 2024

Just because something is shiny and new, and designed with the latest technology in mind, doesn't necessarily mean it's any good. A case in point is the use of cryptocurrency in gambling at online casinos. As a payment method it's long-winded, difficult to use with many stages to master, and being highly volatile, pretty much useless for maintaining your bankroll's fixed value.

Cryptocurrency is a hot topic in online gambling these days. Media outlets talk about its advantages and disadvantages. At the same time, many online gambling sites in the UK offer special crypto bonuses and promotions. Doing some research beforehand is the best way to ensure you don't run into any problems while using cryptocurrencies for gambling. It's not just about the casinos anymore; it's about the money and how you use it. Fortunately, we're here at Gamingzion.com to give you a detailed look at cryptocurrency. We'll discuss the pros and cons of using cryptocurrency for gambling and help you decide if you want to make the switch. Spoiler alert: we don't recommend it!

Basics Of Cryptocurrency For Gambling

So, how does cryptocurrency actually work? Before you decide if it's right for you (it's not!), let's delve into the basics. Cryptocurrency operates using a technology called blockchain. Think of a blockchain as a digital ledger, similar to a record book. But a key difference is that it's not stored in one place. Instead, it's spread across a large network of computers, known as nodes. Each node holds a copy of the entire blockchain, thus ensuring transparency and security. This decentralized system means there's no central authority, like a bank or government, controlling the currency.

Cryptocurrency Mining

When it comes to creating new cryptocurrency or processing transactions, there's a process called "mining." This is essentially what keeps the system functioning smoothly. Miners are participants in the network who use specialized computers to solve complex mathematical puzzles. These puzzles validate and group pending transactions into a "block."

Miners compete to be the first to solve these puzzles, and the winner adds the block to the blockchain. Once a block is added, the associated transactions are considered confirmed.

Wallets And Security With Cryptocurrency For Gambling

Security is crucial in the world of cryptocurrency. Cryptography, which uses advanced maths to protect information, plays a key role. Each user has two cryptographic keys: a public key (like an address) that's visible to others, and a private key (like a password) that must be kept secret. This setup is similar to the excitement of casino games that cryptocurrency enables. When you want to send cryptocurrency to someone, you use your private key to sign the transaction, proving ownership. The recipient then uses their public key to confirm the transaction's legitimacy. Cryptocurrency users keep their digital coins in digital wallets, also known as e-wallets, which can be software-based (online or mobile apps) or hardware devices. These wallets contain the keys needed to access and manage your cryptocurrency securely. Essentially, a wallet is where your digital assets are stored safely.

How Do You Start Using Cryptocurrency For Gambling?

Maybe you're all set to switch over and start using cryptocurrency for gambling on your preferred site. But how do you begin? Every crypto fan will boast about how cryptocurrency is designed to be user-friendly and accessible, even for beginners. But, as shown by its slow uptake with the public, and the steps below, it's a drag to use. However, let's look at the steps needed to get started.

Choose Your Wallet - The first step is selecting your wallet. This is essentially a digital tool for storing, sending, and receiving your digital coins. These wallets come in various forms, such as mobile apps, web-based platforms, or hardware devices. Pick one that aligns with your preferences in terms of accessibility and security.

Acquire Cryptocurrency - This is often the most intimidating step for beginners, actually obtaining the cryptocurrency for your e-wallet. You can either buy it or earn it through various methods. Most people purchase cryptocurrency for gambling from cryptocurrency exchanges, online platforms that allow you to exchange traditional money (like dollars or euros) for digital currencies such as Bitcoin or Ethereum. You can link your wallet to the exchange and transfer the purchased cryptocurrency to your wallet for safekeeping.

Secure Your Wallet - It's crucial to protect your wallet and the private keys associated with it. Your private key serves as the password to access your cryptocurrency. Ensure that you keep this key confidential and store it in a secure location. Hardware wallets are renowned for their high level of security, but regardless of the type of wallet you choose, safeguard your password just as you would with any other banking app.

Start Using It! - You've completed the process, have your cryptocurrency in your wallet, and are ready to roll. You can send it to others by knowing their wallet address, similar to their account number. And most importantly, you can use cryptocurrency for gambling by directly connecting it with your favorite gambling sites like King Billy Casino.

Are There Any Pros To Crypto Using Cryptocurrency For Gambling?

Unfortunately, every Bitcoin has its flip side and Crypto is more full of cons as pros. In truth, you'll read a lot about the pros of utilizing cryptocurrency for gambling. But much of this is nothing more than hot air designed to get you through the door of an online casino. You'll be informed that gambling at cryptocurrency casinos comes with several advantages. For example, it offers a higher level of privacy and anonymity compared to traditional payment methods. Cryptocurrency transactions are pseudonymous, meaning that although the transactions are recorded on the blockchain, the identities of the users involved aren't directly linked to those transactions. As we'll see later, these points are moot.

In The Real World Transaction Are Slower

We're also told that speed is another significant advantage. Cryptocurrency transactions are said to be faster and more efficient than traditional banking methods, which may involve delays and fees. We're told that this rapid transaction speed is especially useful in the fast-paced world of online gambling. But this is simply not true. Bitcoin can only perform 4.7 transactions per second, compared with Visa which can perform 1,700 in the same time frame. So when it's a busy period, you're going to be waiting sometimes for over two hours for any transactions to be validated.

Cryptocurrency For Gambling - Price Volatility

Another major drawback of cryptocurrency for gambling is its shocking price volatility. The value of cryptocurrencies such as Bitcoin can change dramatically over short periods. This means that the amount you wager and potentially win or lose can shift rapidly, introducing uncertainty and added risk for gamblers. According to online casino news in the UK, it can be particularly challenging when trying to manage your bankroll and anticipate your spending patterns.

Remember Those KYC Requirements?

Then consider that while the anonymity of cryptocurrencies is often seen as a benefit. The truth of the matter is that the anonymity factor is redundant.

That's because in order to make a withdrawal from any reputable online casino like King Billy Casino, you'll have to fulfill their KYC (Know Your Customer) requirements. This involves uploading government-issued photo IDs, as well as proof of address and the source of funds.

Cryptocurrency For Gambling - Irreversible Transactions

Also, keep in mind that transactions are irreversible. If you happen to make a fat-finger mistake and spend too much, there's no way to retrieve it. You could easily spend too much money and be out of pocket. At least with using a third party in between, like an e-wallet with PayPal or Neteller, credit card, or bank account, there's going to be some recourse to get those funds back. Many illegal offshore casinos only accept cryptocurrency for gambling. Now ask yourself why is that. Yep, it's so easy to scam customers, who thanks to the anonymous nature of wallets, can do nothing but wave goodbye to their coins.

There's A Reason You're Not Already Using Crypto

Additionally, it's worth noting that cryptocurrency for gambling is still relatively new, which means users may encounter a lack of customer support, user-friendly interfaces, and established industry standards. This can result in a less intuitive and potentially confusing experience, especially for those who are new to both cryptocurrency and online gambling. It's certainly a lot to weigh up. But there's probably a reason you're not already using crypto to fund your online casino account. Or for any other purpose for that matter. Though no one wants to say it out loud, all crypto is a "greater fool" product. This is where you have crypto only in the hope you can get rid of it to a greater fool for a profit before the price falls.