The spread of cryptocurrencies has influenced the gambling industry as well. Online platforms have appeared where you can play for cryptocurrency, and not just for conventional currencies. In this article, we will tell you what is the peculiarity of such platforms and what types of gambling are represented on them.
We will also tell you about the project of our partners — Bitoto P2P sweepstakes.
Features of gambling with cryptocurrency
Cryptocurrencies solve a number of problems that online gambling websites have. First of all, there is an access problem. Cryptocurrencies are available anywhere in the world where there is internet. This expands the geography of users for the gambling platforms themselves and gives players more choice.
Unlike bank accounts, cryptocurrency wallets don’t collect users’ personal data. To create a cryptocurrency wallet, you only need to set a password; you don’t need to leave any passport data and phone numbers. Therefore, the anonymity of cryptocurrencies is higher. But in practice, cryptocurrencies don’t always guarantee players’ anonymity. Many online gambling platforms obtain a gambling license that imposes certain obligations on it. Depending on the license, gabling platform may introduce mandatory KYC verification. Therefore, users will still have to leave personal data, as they trust licensed platforms more.
It can be difficult for beginners to figure out how to buy cryptocurrency and transfer it to a gambling platform. Payment with fiat money using bank cards is more familiar to a wide audience of players. Creating a cryptocurrency wallet, finding a platform to buy cryptocurrency and then transferring coins can be difficult for new users.
You can buy cryptocurrency from our P2P exchanger. We have prepared an educational course for beginners, in which, in a few short video tutorials, we have explained how to buy and sell cryptocurrency on Bitzlato.
One of the problems of cryptocurrency gambling platforms is to wait a long time for the money to come to the platform account. Cryptocurrency transactions can take anywhere from a few seconds to several days or even weeks, depending on the fees and load on the blockchain network. If the user chooses a small fee for the transfer, then the transaction may take several hours, days, or even freeze. Online casino players with fiat currencies are used to instant deposits. And in a crypto casino, they have to wait for the opportunity to play, which negatively affects the income of the gambling platform.
A sharp change in the cryptocurrency exchange rate affects both platforms and players. The cost of cryptocurrencies can change dramatically, which affects the income of platforms and players. If the cryptocurrency rate falls, then the players will receive less income from the winnings in terms of fiat currency. And for the gambling platform, it will be more difficult to pay for contractors, such as game developers, if these contractors accept payment in fiat.
Types of gambling with cryptocurrency
In order to more accurately describe how cryptocurrencies and blockchain are used in online gambling platforms, we will divide them into types:
Crypto Casino: analogs of conventional online casinos. They feature slots, roulettes, card games, dice and other typical casino games.
Crypto Casinos can be divided into 2 segments:
- casinos that use blockchain in their work. In addition to the open source code of games on GitHub, the platform records all game data on the blockchain. Therefore, players can check the balance of the casino and the honesty of its work.
- casinos that don’t use blockchain in their work, but accept bitcoin and other coins for payment. Such websites can simultaneously support both fiat and cryptocurrency deposits.
Most crypto casinos don’t use blockchain in their work because it is more difficult to obtain a gambling license for it. In order to obtain a license, casinos need to go through technical audits. Not all license-issuing countries are able to conduct a technical audit of the blockchain. Therefore, crypto casinos operating under the license of these countries cannot use the blockchain.
Blockchain Lotteries: platforms that use cryptocurrency and blockchain technologies to conduct lotteries. In regular lotteries, participants cannot independently check the fairness of the prize drawing, and large winnings are paid in installments. Sometimes it takes years to get them. Blockchain solves these problems:
- Any participant can see what transactions take place on the blockchain, how the winnings are distributed and whether they are paid at all. Blockchain guarantees lottery fairness and transparency.
- The funds of each participant are recorded in the blockchain and prizes are paid from it. This solves the problem of collecting money from participants and distributing winnings.
To participate in blockchain lotteries, users buy lottery tickets for cryptocurrency. Then it is added to a common bank — a blockchain smart contract. It automatically distributes the winnings among the winners. The smart contract code is open source, so you can study it yourself or read technical audits from independent companies. The code prescribes what percentage will go to the lottery’s organizers and on how will the drawing be conducted.
Crypto Betting: platforms where users can place bets on events. As a rule, bets are placed on sports, the rise or fall of the cryptocurrency exchange rate. But bets are also possible on events from other fields: for example, on the winner of the US presidential election. Just like crypto casinos, cryptocurrency betting platforms can work with or without blockchain.
Betting platforms that only accept payments in cryptocurrency are divided into 2 categories:
- They work with cryptocurrency only. All operations on the platform such as deposits, bets and withdrawals, are possible only in cryptocurrency
- They work with both cryptocurrency and fiat. On such platforms, you make a deposit in cryptocurrency, after which it is automatically converted to fiat at the current exchange rate. You place your bets in fiat currency, and when you withdraw funds, the system automatically converts them back to cryptocurrency.
- On some platforms, you can make deposits and withdraw funds in both cryptocurrency and fiat. Cryptocurrency is only an alternative way of depositing and withdrawing for those who are more comfortable with this method.
Betting platforms that use blockchain in their work are divided into 2 categories:
- They use common blockchain platforms such as Ethereum or TRON. Such blockchains are used not only for gambling. Depending on the platform, bets are accepted in the main blockchain cryptocurrency or in special game tokens.
- They use blockchains created specifically for gambling. As a rule, these blockchains are developed for a specific betting platform and they are named the same as the platform itself. Bets are accepted only in special game tokens.
In the decentralized finance ecosystem, the results of such bets are used to assess the probability of an event occurring. For example, the probability that the value of bitcoin will rise by more than 25% over the next week. The community can see how many people believe in a particular outcome and take this data into account when making money in the DeFi ecosystem.
P2P sweepstakes: subcategory of crypto betting. On such platforms, users place bets with each other and the platform acts only as an intermediary between them. For example, two users place bets on two opposite outcomes of the same event. The platform fee is deducted from the sum of these bets and this amount is credited to the user whose outcome of the event came true.
What is Bitoto
Our partners’ project Bitoto is a P2P sweepstakes in which you place bets on the rise or fall of the value of bitcoin. Bitoto is an intermediary between you and other users against whom you are placing bets. Winnings are paid in bitcoins.
Technically, Bitoto works using a telegram bot. You only need a Telegram account in order to use Bitoto. You don’t need to go through verification by documents.
At Bitoto, you can place bets on one of 3 time intervals:
- 30 minutes;
- 2 hours;
- 24 hours.
You are betting that the bitcoin rate will go up or down towards the end of the selected interval. When the time interval passes, the system determines the outcome and counts the users whose bet was played. Then telegram bot takes 10% fee from the winnings and sends it to the winners. Bitoto compares the bitcoin exchange rate for the BTC/USDT pair on the Binance exchange and indicates the time in UTC. If no one is playing against your bet, Bitoto will return your bet to you.
The platform has a two-level referral program. If someone signs up using your link, they become a first-level referral. You get 5% of each winnings of a first-level referral. When someone signs up using the link of your referral, they become a second-level referral for you. You get 2% of all these users’ winnings. Bitcoin referral rewards are paid daily.
If you have any questions about using P2P sweepstakes, Bitoto technical support works 24/7.
Cryptocurrencies have had an impact on the gambling industry as well. They solve the problem of player accessibility and security. But the use of cryptocurrencies in online gambling has its own problems, which also need to be solved:
- difficulty of cryptocurrencies for beginners;
- speed of cryptocurrency transactions;
- volatility of cryptocurrency.
Crypto gambling platforms can use the blockchain to operate or only accept cryptocurrency deposits. They can be divided into 4 types:
- Crypto Casinos: the games are analogues of the regular online casinos, such as roulette, slots, dice and card games.
- Blockchain Lotteries: lotteries that use blockchain to collect and distribute winnings.
- Crypto Betting: the ability to place bets with cryptocurrency on sports or other events.
P2P sweepstakes: platforms that act as an intermediary between users who place bets against each other. For example, our partners at Bitoto work this way.