Playing Vegas casino games using cybercurrencies is a gamble in itself. Cybercurrencies are new and there's an element of insecurity in using them. Yet some of the world's biggest investors have put their eggs in the cybercurrency basket – maybe not all of their eggs, but a significant portion of the basket. That sends a message to others that those in the financial world who are up-to-date on the trends and options see cybercurrencies as the wave of the future.
What does this mean for the casino industry? For the casinos and for their patrons?
What are Cybercurrencies
Cybercurrencies (generally referred to as "bitcoins" though, in fact, bitcoins are only one form of cybercurrency) are snippets of code that represent ownership of a digital concept – something of value. Bitcoins are acquired, used as forms of payment and traded via distributed networks that maintain ledgers of balances of the individual bitcoins.
Using a cybercurrency users and investors can send payments from one to another by electronic means. There is no central authority (bank or payment gateway) involved since the cybercurrency is produced by computers that "mine" the coins using specially-designed software. Basically, cybercurrencies share characteristics of traditional currencies but verification is based on cryptography.
Cybercurrencies are both similar and different from traditional currencies They are bused when both parties are willing to make transactions using that form of currency. There are also significant cybercurrency variations form traditional currency.
- They are decentralized. They are not controlled by any single institution but, instead, are maintained by groups of volunteer coders who run open networks of computers that mine new coins and track transactions in virtual "ledgers."
- There is a limited supply of these coins. Supplies of traditional currencies (such as Euros, yen, dollars, etc) grow and be revalued based on the decisions of the central banks. On the other hand the supply of cybercurrencies is controlled by the underlying algorithm which allows new coins to trickle out slowly. For Bitcoins, for example, there will be a maximum 21 million bitcoins issued by 2031. Therefore, the value will increase as the demand grows and supply remains the same.
- There's an element of anonymity for cybercurrency users. When transactions are made using traditional electronic payments, governments and other central authorities can identify the users. Cybercurrency users operate with semi-anonymity since they don't need to identify themselves when making a transaction. When a transaction request is submitted, the protocol confirms that the sender has the authority to send as well as the needed currency. The protocol does this by checking previous transactions. The system does this without any need for identifying information which gives users an element of anonymity. Over the years many governments have instituted legal requirements for cybercurrency transactions including the requirement to perform identity checks on customers before the customer buys or sells the cybercurrencies. But at this point cybercurrency transactions are still less regulated than other online currency transactions.
Pros and Cons
Many land-based and online casinos are now offering cryptocurrency users the option to play with bitcoins and other forms of cybercurrency. Should a gamer take advantage of these opportunities? Cybercurrency usage is still young so there's no yes or no answer pertaining to the wisdom of playing at a casino with a cryptocurrency. As you make your decision you might want to think of some of the pros and cons involved in cryptocurrency gambling activities.
Cons
Volatile
The cryptocurrency market is volatile, and has been since its inception. The price of a coin can fluctuate from 1% - 40% within a matter of weeks. At this point, the price has more than quadrupled just in the last year but in 2013 one bubble burst and users lost significant portions of their investments. If you want to gamble with a cybercurrency, try to analyze whether the market is currently in a bubble. If you think that that might be true, consider putting off your usage, at least on a big scale, until things stabilize.
Risk
There's more of a risk in playing with cybercurrencies than there is with playing with traditional currencies. If you have a stock of cryptocurrencies you might want to pull out before the market slumps but that may not be the best move. It might be a better long-term option to continue playing with your cybercurrencies and wait out the downturn when, hopefully, those coins will be worth much more. With cybercurrency usage, there's more of an element of psychological factors to consider than there is when you use traditional currencies. (The risks are similar but because of the volatile nature of cybercurrencies, it's more pronounced). .
Limitations
You can only trade cryptocurrencies on the stock market with one of the cryptocurrency GBTCs. That means that, if you enjoy a big win at the casino and wish to invest it in stocks, you'll need to use a company like Coinbase to facilitate your investments. These companies tend to charge a premium for their services. You can find the lowest fees on the open exchanges of the internet where their fees are low but these open exchanges have a higher risk and complexity. Between finding a seller and paying the premium fees the options for trading your casino wins carry costs that are hard to calculate but can eat into your gains.
Pros
Wave of the Future
Cryptocurrencies might well be the wave of the future. The trend seems to indicate that using cybercurrencies will be an important medium of exchange and value storage in the future. So it may be a good long term bet – maybe not for day traders but for long-term investors who want to grow their casino winnings through investing their assets.
Young Market
Cryptocurrency market is young. Financial analysts project that future prices will continue to rise, making it a good bet to lay your casino wins in the cryptocurrency basket. Some notable observers project that bitcoin may move up to as much as $600K. That makes it a worthwhile focus for anyone who wants to see their money grow.
Today's high cybercurrency prices may indicate that the cryptocurrency is in a bubble but even if the value decreases, chances are that it will increase again in the future. The trends seem to indicate that governments are also viewing cybercurrencies as the wave of the future, giving rise to a feeling that these currencies offer a good option on which people can lean. There is a lot about which to be excited in the field.
