7 reasons online casinos should warm up to Ethereum
Some of the gambling sites we list here on Coinber.com accept Ethereum along with a number of other cryptocurrency platforms. When compared to the total number of gambling sites on the internet though, the actual number that accept Ethereum is relatively small. That is unfortunate.
Unlike Bitcoin and Bitcoin Cash, Ethereum is more than just a cryptocurrency. It is actually an entire software platform on which applications of all kinds can be built. The cryptocurrency linked to Ethereum, known as ether (ETH), is just one small component of a much larger system.
In our humble opinion, more online casinos should warm up to the Ethereum platform. They should use the platform to further develop their sites while simultaneously accepting ETH deposits from gamblers. Fully embracing Ethereum and all it has to offer could help improve an online casino's operations and bottom line.
Here are 7 reasons we believe online operators should warm up to Ethereum:
1. Lower transaction fees
In terms of accepting ETH deposits, embracing Ethereum would mean lower transaction fees for both operators and gamblers. One look at historical transaction data clearly shows that ETH consistently beats Bitcoin (BTC) in transaction fees. It also does better than Monero most of the time. ETH tends to be on par with Litecoin, Bitcoin Cash, and a few others.
The benefits of lower transaction fees should be obvious. First, if gamblers can choose between multiple cryptocurrencies with different user fees attached, they are most likely to choose the one with the lowest fees. That is just common sense. So accepting ETH alongside BTC and others would attract more gamblers looking for less expensive deposits.
Attracting new gamblers would obviously benefit operators. But there is another benefit here: operators would spend less on the fees they pay for their own transactions. Lower fees mean more money to put back into the business. Indeed, everyone wins with lower transaction fees.
2. Better transaction security
Like every other blockchain platform, Ethereum offers a level of security that is just not available with traditional bank transactions. There are a number of reasons for this, not the least of which is encryption.
All transaction data traveling across the Ethereum network is encrypted. The platform uses asymmetric cryptography that requires both public and private keys. The sender needs the public key made available by the recipient in order to push coins to that recipient's wallet. Likewise, the recipient needs the sender's private key so that his wallet can decrypt the information and receive the payment.
Without both public and private keys, intercepted data is useless to a hacker. That makes it very difficult to alter a transaction or prevent it from occurring. This is one of the things that make Ethereum and other blockchain platforms so secure.
Moreover, the use of encryption and pseudonymous addresses make it virtually impossible for anyone to link an ETH transaction to a given user. No personal, identifying information ever travel across the Ethereum network because it is never required to complete a transaction.
This greatly reduces fraud. By completing transactions without the use of personal information, no one could trace ETH back to the original user in order to discover that person's identity. Gamblers can deposit ETH at their favorite online casinos without having to worry about becoming victims of identity theft.
3. Faster transaction processing
Every cryptocurrency platform enjoys faster transaction processing compared to traditional fiat transactions. For example, imagine you are living in London and you want to play MegaMoolah.com at a casino website hosted in Malta. Depositing fiat by way of electronic transfer from your bank could take several hours if not a day or two to clear. You could always use your credit card, but why pay interest on a casino deposit? That doesn't make sense.
Use a cryptocurrency and your deposit will clear in mere minutes. Ethereum may not be the fastest cryptocurrency platform out there, but it is faster than most. It is also faster than banks and most electronic payment systems.
4. More payment options
The success of any business relies on its ability to keep customers happy. This is as true for online gambling as any other industry. And one thing customers are demanding with greater frequency today is more payment options. Customers do not want to be limited to using cash or their credit cards.
This suggests that any gambling site operators not currently accepting cryptocurrency need to change that. Crypto is fast becoming one of the preferred deposit methods for online gamblers looking to maintain security and anonymity. But let us take that one step further to talk specifically about Ethereum.
It has been our experience that every online casino accepting cryptocurrency deposits also accepts Bitcoin. It stands to reason, given Bitcoin's dominance of the cryptocurrency space. But here's the thing: not every operator that accepts BTC also accepts ETH.
Just like accepting cryptocurrency expands an operator's payment options, accepting ETH expands an operator's cryptocurrency choices. The more choices gamblers have, the happier they are. And let's face it, there's no legitimate reason to not accept ETH if you're already accepting BTC.
5. Achieving a global reach
Next, accepting cryptocurrencies for deposit expands on online casino's reach on a global scale. How so? Consider the fact that there are some countries in which online gambling is either heavily restricted or completely banned. Gamblers in those countries might want to visit sites located elsewhere - like the UK or Malta. That is all well and good, but they can't transfer money from their bank accounts to the casinos due to restrictions in their own countries.
Cryptocurrency solves that problem. Because cryptocurrency is traded outside of government and central bank interference, gamblers can send deposits to casinos around the world without issue. They just acquire the right coins and then initiate a transaction that pushes those coins from their wallets to casino wallets.
Accepting ETH in order to expand an operator's reach is not necessarily better than accepting BTC or any other cryptocurrency. But again, there is no reason to not accept ETH alongside all of the other cryptocurrencies an operator already offers.
6. Provably fair operations
One of Ethereum's unique aspects is the way it utilizes smart contracts to facilitate transactions. Without getting into a lot of detail, properly deployed smart contracts could be used to establish a provably fair online gambling operation.
What does it mean to be provably fair? The concept of provably fair is one of using a computer algorithm to demonstrate that an operator's games are fair to gamblers. Rather than use such an algorithm, most gambling websites rely on third-party audits to demonstrate fairness.
Third-party audits are an excellent tool for their intended purpose. Auditing a game with established mathematical odds makes it possible for auditors to determine fairness simply by running large-scale tests. However, a provably fair algorithm executed by way of a smart contract can do much the same thing and with greater accuracy.
A provably fair algorithm utilizes random seed generation, hashing, and random number generation to verify each and every transaction. And by 'transaction' here, we mean spinning the reels of a video slot, turning the cards in a poker game, etc. Verifying transactions in the same way miners verify cryptocurrency transactions makes it fairly simple to prove that a game is fair.
How does this help operators? By giving them a second tool for demonstrating fairness. Provably fair algorithms and smart contracts do have their limits, so relying just on this automated system is unwise. But combining the provably fair strategy with third-party auditing can make an operator's claims of being fair very hard to refute.
7. More efficient operations
Above and beyond accepting deposits and proving their operations, Ethereum is a platform that can be used to run the back-office by way of applications written on top of the platform. One example would be an Ethereum application the operator uses to maintain its own accounting and financials. All of the strengths of Ethereum's cryptocurrency platform would also apply to the back-office software.
Applications built on Ethereum blockchain could be used to execute smart contract payments from online operators to game license owners. They could be used to track progressive jackpots, maintain loyalty programs, and on and on. Because Ethereum was developed as a software development platform rather than just a monetary system, its potential goes far beyond trading ETH coins.
There is a lot of information about Ethereum and ETH in this post. So to summarize, ETH is the coin associated with the Ethereum blockchain platform. ETH can be accepted by online casinos as a form of payment. Operators should seriously consider embracing Ethereum if they want lower transaction fees, faster transaction speeds, better security, and expanded reach.
In addition to the financial benefits of accepting ETH, online operators can use the Ethereum platform to demonstrate the fairness of their operations. They can use it to streamline back-office operations through applications built on top of Ethereum.
Knowing what you now know, does it make sense for an online operator to not at least consider Ethereum? We think so. We see a lot of advantages to embracing Ethereum with very few disadvantages. Embracing Ethereum seems to be a no-brainer.