How the Blockchain Makes BTC Gambling Safe, but Not Risk-Free

Key Features of Bitcoin Gambling

There are several key features of BTC gambling, including regulation, legality, provable fairness, and security.

Regulation

Much like traditional online casinos, Bitcoin casinos are regulated, and you will want to make sure that the one you are interested in using is registered with a reputable licensee.

Where the casino is registered also matters, as some licenses are easier to get than others, meaning that some have higher protection for customers than others do.

Legality

The legality of Bitcoin gambling is based on the country you are gambling in (where the casino is registered) and not the country you are living in.

It is legal to gamble online in almost all US states, so it is just about finding a site that accepts US users if you are interested in Bitcoin gambling.

Provably Fair Bitcoin Games

Many online casinos accepting Bitcoin and other cryptocurrencies have decided on proving to players that there is no way they could have manipulated the results of a wager, using the same mathematical concepts well-known in cryptography.

This is called provable fairness. To show users that their games are provably fair, the transparently show users the algorithms used to play the game, and users can check these algorithms themselves at any time while they are playing.

The exact process varies from site to site, but generally it involves a server seed, a hashing function, a hash of the server seed, a client seed, and a nonce. The client seed, the hash of the server seed, and the nonce are known by the user at first, and once the server seed is revealed, they can all be used together to prove all bets have been fair.

For example, on BitStarz you can view the fingerprint (bet amount, what you bet on, etc.) of your wager before playing the game and then verify that the fingerprint entered into the game was the same, thereby proving that the bet was fair.

Security

Because Bitcoin casinos and crypto casinos involve blockchain, they are actually quite safe as long as the site is trustworthy. Bitcoin wallets are arguably safer than bank accounts for transfers, and the blockchain is essentially unable to be hacked, meaning your funds are much safer than when stored on a traditional gambling site that you fund with a bank account.

How is Bitcoin Gambling Different from Traditional Gambling?

Understanding what bitcoin gambling is—and how it’s different from traditional gambling—is not as complicated as you think.

First, Bitcoin gambling is almost largely anonymous. When you use Bitcoin or other cryptocurrencies to fund your account, you can deposit funds without having to provide identity information. However, if you want to deposit fiat currencies such as USD or EUR, you will have to complete standard Know Your Customer (KYC) and Anti-Money Laundering (AML) identity procedures.

Next, funding a Bitcoin gambling account is generally faster and often cheaper than using traditional payment methods. This applies to online casinos as well as activities like sports betting with crypto.

Cryptocurrency transactions are processed quickly and usually only require a network fee. By contrast, traditional gambling typically involves linking a bank account, which comes with longer processing times and additional fees.

Finally, BTC gambling is different from traditional gambling because Bitcoin casinos (at least the ones you should be using) are provably fair and transparent. This means that you can check their algorithms and see that the games truly are chance. That goes for everything from roulette to Bitcoin poker.

BTC casinos also tend to have a lower house edge than traditional online casinos due to lower operating costs, which can result in better odds for players.

How Can I Start to Gamble with Bitcoin?

To start gambling with Bitcoin, you’ll first need to own some.

Before buying Bitcoin, you’ll also need a personal crypto wallet to store it. You can’t gamble directly from an  exchange or other custodial platform, although you’ll likely use an exchange to make your initial purchase.

Once you’ve bought Bitcoin and transferred it to your wallet, you can choose a gambling site and deposit funds to begin placing bets.

Is Bitcoin Gambling Legal in the US?

Yes, Bitcoin gambling is legal in most US states, and it can actually be easier to gamble online as a US citizen if you use Bitcoin.

This is because of the Unlawful Internet Gambling Enforcement Act (UIGEA), which imposes stringent regulatory oversight regarding how banks process gambling-related transactions, meaning it is difficult to fund online gambling with traditional finance methods as a US citizen.

Using Bitcoin circumvents this issue, as you are not using a bank as an intermediary.

Is Bitcoin Gambling Safe?

It depends on the site.  As long as the site is trustworthy, Bitcoin gambling is quite safe because all transactions take place using the security of blockchain.

On the other hand, there are plenty of scams out there, so make sure you do your research if you are actually going to transfer your hard-earned Bitcoin onto a gambling site.