Blockchain has evolved from being just a mode to trade or be a keeper of values and has now become a payment method at online casinos.
Bitcoin, an application to mine and trade cryptocurrency, was even considered a bust during its early years due to how it will be part of an individual’s daily use.
But in time, people have come to realize that cryptocurrency can work like actual money. So although the “coins” are virtual—meaning it has no physical form—they became valuable.
Useful in the sense that it is now used to buy food, pay for rent, and make day-to-day purchases.
Which is why online casino operators concluded that if cryptocurrency can be used to make daily transactions, why not add it as a mode of cash in and withdrawal in online casinos?
What is Cryptocurrency?
Cryptocurrency is a digital or virtual currency that applies cryptography, or the science of hiding or coding information that only the sender and the recipient can decode. It uses ciphertext, an encoded output that can only be understood by the receiver.
In simpler terms, cryptocurrency boasts secure communications that safeguard the anonymity of the user.
However, many mistakenly identify cryptocurrency as blockchain. But there is a difference.
Blockchain is a ledger that can store data and can record transactions.
Meanwhile, cryptocurrencies are “virtual money,” which can be used for payments, investments, and storage of wealth.
Advantages of Blockchain
Since blockchain is a distributed database or ledger shared among computer networks and electronically stores information, it has an edge over traditional transactions in terms of fidelity and security of data.
A blockchain applies cryptographic hashes and links blocks of information together. The data-filled block cannot be altered or tampered with because it becomes an irreversible timeline of data.
If a hacker, per se, tries to hack a blockchain, the person will not only try to adjust one block but the entire chain of data.
Additionally, it uses a decentralized system, meaning there is no single point of failure. It also means a single user cannot change or manipulate the record of transactions.
Furthermore, it keeps activity anonymous, not to mention, fast. Hence, live online casinos and even the banking industry can benefit from using blockchain because it offers speed and privacy.
It also promotes fairness because only users who use cryptocurrencies in all their online gambling activity. It means that the actual players can personally check the result of the games they played for any randomness.
Although there are many benefits to using cryptocurrency in gambling, it also comes at a disadvantage.
Disadvantages of Blockchain
While immutability is a desirable feature of blockchain, it can be a disadvantage in certain situations. If a transaction is recorded incorrectly or fraudulently, it becomes challenging to modify or delete that information, which can lead to issues in cases where errors need to be rectified.
Blockchain faces challenges when it comes to scalability, especially in public decentralized networks. As the number of transactions increases, the size of the blockchain grows, leading to slower transaction processing times and increased storage requirements.
Many blockchain networks, particularly those that use proof-of-work (PoW) consensus algorithms like Bitcoin, require significant computational power. The mining process demands a substantial amount of electricity, leading to environmental concerns and high energy consumption.
The design of blockchain imposes limitations on transaction throughput. The decentralized nature of the technology, where every node must validate and record each transaction, can result in slower transaction processing compared to traditional centralized systems.
Lack of Privacy of Public Blockchains
Blockchain is often considered a transparent and immutable ledger, which can be a disadvantage when it comes to privacy. While public blockchains do not reveal personally identifiable information, transaction details can still be visible, potentially compromising user privacy.
Blockchain networks often require consensus among participants to implement changes or upgrades. This can lead to governance challenges, as reaching a consensus among stakeholders can be a complex and time-consuming process, hindering the ability to adapt quickly.
Regulatory and Legal Uncertainty
The decentralized and borderless nature of blockchain technology can create regulatory and legal challenges. Different jurisdictions have varying stances on cryptocurrencies, smart contracts, and blockchain-based applications, leading to uncertainty and potential conflicts.
Interacting with blockchain-based systems can be complex and challenging for non-technical users. Issues such as managing private keys, understanding transaction fees, and navigating decentralized applications (dApps) can present usability barriers.
In conclusion, although there is quite a risk in blockchains, there is a fact that cannot be ignored: online casinos need a feature that can give them an edge over their competitors.
Through the use of cryptocurrency, online gambling operators can offer a more private and safe gambling experience. By pairing virtual money with their best-selling deals and promotions, online casinos like OkBet can even cater to a much wider audience safely and securely.