Bitcoin casinos were a rarely used term before 2013 when bitcoin was still in its infancy. As it grew, crypto betting sites became a lot more popular. There is hesitancy among those who only use credit cards or bank transfers in trying crypto gambling because of misconceptions surrounding cryptocurrency.
This article will cover the basics of how do bitcoin casinos work in order to help you consider switching from fiat currency sites to cryptocurrency sites.
Crypto gambling is illegal in many jurisdictions. Such casinos are often based in offshore jurisdictions, making it impossible for you to go through a legal recourse in case of theft or disagreement.
Bitcoin Casino Defined
Bitcoin casinos are essentially any online gambling sites that accept Bitcoin. This term also extends to online casinos that accept other crypto coins such as Ethereum, Litecoin, and Ripple.
Long-running online casinos or sportsbooks that have been around before the launch of 2013 can also be classified as crypto gambling sites when they start accepting Bitcoin. There are online Bitcoin casinos that fully embraced the technology by offering provably fair games. Provably fair games use Blockchain technology to provide transparency to their results.
How Do Bitcoin Casinos Work
A majority of Bitcoin casinos are running on an online gaming software platform. Think of a platform as a digitized version of a brick & mortar casino that contains your games, cashier, security, and service staff. Reputable software providers have integrated cryptocurrency payment to their platforms, allowing you to deposit and withdraw Bitcoin or other altcoins.
There is a wide range of Bitcoin casino flavors that operators can pick from, which gives them a certain range of customization to create a face for their brand depending on what types of betting they want to offer. Games you can play with your cryptocurrencies usually depend on the kind of online casino platform an operator chooses.
Types of Bitcoin Casinos
White label Bitcoin Casino
One of the most convenient solutions for operators to kick-start their online gambling business is a white-label Bitcoin casino. White-label platforms already have everything integrated into them, including the games, security, payment system, website UI, casino bonuses, and customer support.
Software providers even have the appropriate gaming license for the Bitcoin casino platform. A customer service crew, who will handle custom complaints and various concerns, is also from the software providers' side. In addition, white-label platforms take care of the operator's burden in acquiring a license from their respective jurisdiction.
In exchange for the convenience of having nearly everything in place, operators usually agree on a revenue share with the platform providers. An average revenue share provided to the operator is usually 40% while the rest goes to the providers. It is important to note that software providers bear the brunt of creating a ready-made Bitcoin casino whereas operators only have to focus on the marketing and branding of their online crypto gambling site.
In regards to the games, chances are low of finding a white label casino with unique games since there is little to no customization option. If you are set on the games of a software provider, such as Betsoft's 3D slots or Microgaming's extensive list of casino titles, you will want to find a white-label Bitcoin casino from a familiar gaming company.
Turnkey Bitcoin Casino
Another ready-made platform is turnkey Bitcoin casinos. A good way to think of this platform is a casino with several games on the floor with empty cages and offices. Turnkey platforms have the website UI, several games, and a security setup.
Operators have more control over the shape of their turnkey Bitcoin casino such as the back office tool or business management side of the website. Other options they can adjust are the KYC process tools, guests monitoring, and various security factors of the website. Operators can also hire their support line who takes care of customer concerns or choose to have the platform provider set their helpline for their Bitcoin casino.
Additional work is required when launching with a Turnkey Bitcoin casino since a gaming license does not come with the package. Fortunately, the software provider's team can assist an operator when obtaining a license from their respective jurisdiction. Legacy platforms tend to only have fiat payments, requiring operators to find a cryptocurrency integration solution before they can accept Bitcoin.
Game variety is much better among turnkey Bitcoin casinos since operators have full control over the software they can add to the platform. This includes adding software from various third-party gaming companies for games such as slots.
Self-Service Bitcoin Casino
Self-service casino platforms are the most flexible solution out of all three packages. Imagine this platform as an empty lot with containers filled with the building blocks for constructing a casino. Operators have full control over what they can add to their casino as well as its shape.
How does a self-service Bitcoin casino work? Operators use API protocols to build their online gambling sites. APIs consist of game libraries, back offices, casino bonuses, cryptocurrency support, customer service, and much more. These API protocols can come from a single provider, who can assist the operator in building their online Bitcoin casino. Despite the assistance, it's the operators that have the final say on the front-end and design of their online gambling site.
Building an online casino from scratch does come with its common disadvantage of overseeing the construction and operation on your own. This includes securing a gaming license, making sure every game is running, setting a cryptocurrency payment system, and much more.
You can expect self-service Bitcoin casinos to have a deluge of online casino games from different software providers. Certain crypto gambling sites will offer unique provably fair games that are different from the usual titles seen among white label and turnkey platforms.
Earlier Bitcoin Casinos
Before the Fortunejack or mBit casinos, there were the likes of SatoshiDice and Anonibet when Bitcoin was trying to find a foothold in the online gaming industry. Cryptocurrency has always been an intriguing payment system that separates itself from traditional bank accounts or credit cards. There was no intermediary when transacting with Bitcoin and the system is transparent where everyone can see the payments between two wallets on a public ledger.
While Blockchain technology is amazing, there was no system to integrate cryptocurrencies into online gambling sites. Modern crypto gambling sites can assign a unique wallet to a player. This wallet contains the player's cryptocurrency in casino credits. These credits can be used to wager in digital table games or online slots. Winnings are returned to the player's wallet as credits, which are turned to Bitcoin or other altcoins when withdrawn from a casino.
We recommend all readers stick to locally-licensed FIAT casinos to avoid scams. Remember that with crypto gambling, your money can be lost without any recourse available to you.
In 2011, AnoniBet made history by being the first gambling site to allow Bitcoin deposits and withdrawals. This site has both online casino games and sports betting. True to its name, AnoniBet made it possible for players to make bets with only a valid email address and a working Bitcoin wallet. Everyone can play anonymously here, unlike conventional online casinos during its time.
There are early Bitcoin casinos that do not have the same payment system as AnoniBet. Instead, these sites find a method unique to Blockchain technology. SatoshiDice uses a special Bitcoin address where players send their cryptocurrency. Once the site receives your Bitcoin, it will roll the dice and send your payout to your wallet if you win.
Why Bitcoin Casinos are Popular
Below are reasons why people are turning to Bitcoin instead of their credit cards when visiting online casinos.
Fiat withdrawal options such as credit cards and bank transfers usually take three to five working days. On the other hand, once you have bought it, Bitcoin withdrawals take less than an hour to complete. Cryptocurrencies' fast deposit and withdrawal speed are due to the absence of an intermediary since it is a peer-to-peer transaction.
Blockchain wallets do not have any means to store your geographical location, personal identity, or any banking information. Payments made to any online Bitcoin casino are anonymous, especially ones that do not require players to go through a KYC process.
It is important to note that your privacy depends on how you buy your cryptocurrency. If done through an exchange, you are likely to provide your personal information, credit card number, or other payment data. There are several ways you can buy anonymously with cash in different countries such as a Bitcoin ATM or buying coins from other owners through LocalBitcoins.com.
Several countries have made online gambling illegal. These regions have geographical restrictions among online casinos while credit card companies and other payment services are restricted from transacting with gambling companies.
Bitcoin and other cryptocurrencies allow any players to bypass the restrictions set by their government. Anyone can buy Bitcoin and other altcoins without using any centralized payment options such as credit cards. In addition, several online Bitcoin casinos are not restricted among various countries.
How Do Bitcoin Casinos Work: FAQ
We've collected and answered the most common questions about how bitcoin casinos work:
What are Bitcoin casinos?
These online gambling sites accept Bitcoin and other cryptocurrencies. Gambling sites that offer provably fair games such as SatoshiDice are also considered Bitcoin casinos.
Can any online casino accept cryptocurrencies?
To accept Bitcoin and other altcoins, an online casino platform must have an API protocol that enables cryptocurrency deposits and withdrawals.
Can I convert my fiat money to cryptocurrencies among Bitcoin casinos?
Online Bitcoin casinos do not allow or have an exchange function that can turn fiat money into Bitcoin or vice versa. Players need to purchase Bitcoin from an exchange before they can play at a Bitcoin casino.
Does a Bitcoin casino require a license?
Modern Bitcoin casinos that run on online software are required to own a license to operate. If the operator is within the UK for example, they need a UKGC to legally run within their respective region. For earlier versions of Bitcoin casinos or those that are running a unique software that uses Blockchain technology, they do not require a license.
Can I reverse my Bitcoin transaction if I have fallen victim to a phishing scam?
It is not possible to reverse any Bitcoin transaction as well as most cryptocurrencies. There are no offices or central governing bodies with the capabilities of controlling or undoing any cryptocurrency transactions. It pays to check on the legitimacy of an online Bitcoin casino before sending any payments.
Should I play at a Bitcoin casino?
Provably fair games make Bitcoin casinos worth your time. These games provide transparency on the role of every dice, drop of a ball, or spin of a slot reel. Online Bitcoin casinos are also great for those looking for fast withdrawals and anonymous betting.
Bitcoin casinos are the next level of online gambling sites that allow you to enjoy roulette, slots, blackjack, and other casinos games without a bank account or credit card. Blockchain technologies also provide newer casinos experience such as provably fair gambling games.