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The Wild West of Crypto and Online Gambling

The online gambling industry has always lived on the cutting edge of technology. In the early days of the internet, online casinos were some of the first e-commerce sites to pop up. They allowed people to play classic casino games like slots, poker, and blackjack from the comfort of home.

Fast-forward to today, and the gambling industry is entering a new digital frontier: cryptocurrency. Cryptocurrencies like Bitcoin and Ethereum are starting to transform how people gamble online on platforms, such as Yabby Casino. Here’s an in-depth look at how crypto is changing the world of internet gambling.

Rise of Crypto Gambling

Cryptocurrency and online gambling seem made for each other. Both involve taking risks in pursuit of quick rewards. It’s no surprise then that crypto gambling sites have proliferated as digital currencies have grown more popular.

In 2021, cryptocurrency gambling platforms generated over $327 million in revenue. That's more than double from the previous year. The market is forecasted to grow by $197 billion between 2022-2027 as more gamblers adopt digital coins.

Some of the top cryptocurrency casinos allow players to deposit, play, and withdraw winnings in different cryptocurrencies like Bitcoin, Ethereum, Litecoin, and Dogecoin. There are also crypto poker sites, sportsbooks, dice games, and more.

For many online gamblers, the allure of these sites is the anonymity of crypto transactions. Traditional online casinos require personal information like your name, address, and social security number. But with a crypto casino, you only need a digital wallet address to play. This preserves player privacy.

Crypto gambling sites also tend to have lower fees because there are no credit card processing costs. And withdrawals are often faster since there are no banks acting as middlemen. Once you request a payout, your winnings can transfer straight to your crypto wallet.

Provability of Crypto Bets

One unique advantage of cryptocurrency gambling is “provable fairness.” This is the ability to cryptographically verify that gameplay is truly random and not rigged by the casino.

Traditional online casinos use software algorithms to randomly generate game results. But players have to take it on faith that the games aren’t weighted against them.

With crypto gambling, provable fairness protocols allow players to independently verify game integrity. Before each bet, the casino publically shares an encrypted “seed” number. After you place your wager, the casino reveals the decrypted seed to prove how the game’s random result was generated.

By matching the encrypted seed with the revealed seed, players can see that the result was truly random and not manipulated by the casino. This provides an unprecedented level of transparency.

Major crypto gambling platforms like FortuneJack and Bitstarz have successfully implemented provable fairness systems. These protocols are also used in crypto dice games and lotteries. Knowing that gameplay is verifiably random provides gamblers with extra peace of mind.

Volatility of Crypto Value

Of course, every coin has two sides. There are some drawbacks that come with crypto gambling too. One is the volatility of cryptocurrency value.

The value of digital currencies fluctuates dramatically day-to-day based on market sentiment. For instance, in 2021 alone Bitcoin’s price ranged between $28,000 and $69,000 per coin. These huge value swings make gambling with crypto more financially risky.

When you deposit crypto into an online casino, you’re essentially exchanging your coins for gambling chips. If the market value of your crypto drops before you finish playing, your remaining bankroll loses value too. Sudden dips in Bitcoin prices have wiped out many gambler’s funds in the past.

Cryptocurrency volatility also poses challenges for casinos. If the value of the coins they hold drops dramatically overnight, it can put their businesses in financial peril. Some crypto casinos hedge against volatility by converting player deposits into stablecoins like USDTether which are pegged 1:1 to the U.S. dollar.

Guarding Against Crypto Fraud

Another downside of crypto gambling is the potential for fraud. The anonymity of digital currencies means that scammers sometimes launch rigged gambling sites to trick users and steal deposited funds.

Some warning signs of a fraudulent crypto casino include:

  • No licensing or regulation
  • Too-good-to-be-true bonuses
  • Missing provable fairness protocols
  • Faking player reviews and feedback

Because cryptocurrency transactions are irreversible, there is often no recourse if you deposit into a scam site. Your money is gone for good. That’s why it’s critical to only use trustworthy crypto gambling operators.

Reputable platforms verify their fairness systems through third-parties like iTech Labs and askgamblers. They also secure licensing in jurisdictions like Curacao and Malta where regulations require fair gameplay.

The Future of Crypto Gambling

While challenges remain, cryptocurrency still looks poised to overhaul online gambling in the years ahead. More casinos, sportsbooks, poker sites, and gaming dApps will continue adopting digital coins.

Here are two emerging crypto trends to watch in the gambling space:

  1. Increased use of smart contract betting - Smart contracts are self-executing code on a blockchain that trigger actions once certain conditions are met. They allow for provably fair, automated gambling without human intervention. In the future, more betting will move onto networks like Ethereum and Tron that support robust smart contract programming.
  2. Growth of gambling dApps - A decentralized app (dApp) is software built on a blockchain network. Dozens of crypto gambling dApps have launched where users can bet against each other peer-to-peer.

As crypto technology progresses, it will open up even more possibilities like in-game gambling, augmented reality casinos, and virtual reality poker using digital coins. The convergence of blockchain and online gambling is still in its infancy. Expect to see crypto continue modernizing and upgrading the digital betting space in exciting new ways.

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