Bitcoin and other cryptocurrencies are becoming more and more popular. This is especially true in the iGaming space, where the embrace of new technologies is a huge part of the industry landscape. In this blog post, Slotegrator looks at the advantages and disadvantages of integrating Bitcoin as a payment method into online casinos.
Why Operators Should Accept Cryptocurrencies
As Bitcoin operates on a peer to peer network, there is no single authority seeking profits by collecting transaction fees. Bitcoin transaction fees, which are directed to Bitcoin miners and ensure the process is verified, are sometimes as low as $0.04 – negligible when compared to the transactions charged by banks and other financial institutions. Operators will quickly notice that this is a big financial advantage for players who don’t want to lose on every transaction.
Anonymity and Privacy
Whereas traditional financial institutions require large amounts of personal data, much less personal information is involved in Bitcoin transactions – only the Bitcoin wallet address and the public and private keys. Bitcoin networks are decentralized and operate on a peer-to-peer basis.
As players place more and more value on privacy and anonymity, using Bitcoin to make payments will have increasing appeal.
Bitcoin security has an advantage over traditional fiat currency transactions due to its decentralized nature. Whereas traditional financial institutions are in control of a single ledger that contains the information for all their client’s transactions, each Bitcoin has a series of public, decentralized ledgers. Any attempt to tamper with the transaction history would be rejected, making individual transactions highly secure. Operators will find that players respect the security afforded by Bitcoin transactions, especially when compared to some of the security breaches that have hit major financial institutions.
Another advantage is that Bitcoin transactions can be much faster than those involving traditional financial institutions. Deposits and withdrawals made with Bitcoin are often conducted almost immediately. Whereas transactions with fiat currency can take days, Bitcoin transactions might take hours or even minutes. The faster players can deposit, the faster they can start playing, an obvious upside for operators.
Some countries prohibit banks and other financial institutions from conducting transactions related to gambling. Bitcoin allows players to make deposits and withdrawals no matter what jurisdiction they’re located in. Players who otherwise would be unable to make deposits are able to if the casino accepts Bitcoin, allowing operators to offer their services to a wider range of players.
The Downsides of Accepting Cryptocurrencies
One big disadvantage is that Bitcoin is a famously volatile currency. Players could wind up with a great disparity between the amount of fiat currency they initially converted to Bitcoin and the amount they eventually withdraw. Operators may find that players prefer more stable currencies.
Several high-profile Bitcoin security breaches have occurred at cryptocurrency exchanges, with hackers stealing millions of dollars worth of Bitcoin, as well as large amounts of personal data. It’s important to note that security issues arise in situations that resemble traditional financial institutions. While Bitcoin is faster, safer, and more anonymous than fiat currencies, it is still not perfect. If there are any problems, operators might have to deal with players’ unrealistic expectations.
As Bitcoin and all the networks and exchanges that operate with it are relatively new, it’s impossible to predict what changes or events could occur. Operators might face the disadvantage of problems that no one could have predicted.
Evaluating pros and cons of offering cryptocurrencies as a payment method for online casinos, it is important to say that in this case, balance is the best option. Providing both payment options in popular fiat currencies (and currencies of your target market) and cryptocurrencies will help to broaden the audience willing to submit payments and ensure every customer has the option that suits them more.