The prospect of online gambling brings with it the reality that gamblers have to fund their accounts with either fiat or cryptocurrency. This presents a conundrum for people who want to gamble online but don't want to share their gambling habits with their local bank or credit card company.
Cryptocurrencies are viewed as being one way to get around security concerns. In light of that, a relatively newish cryptocurrency known as Monero is suddenly making waves.
Like Bitcoin, Monero can be traded securely online. But unlike most other cryptocurrencies birthed from Bitcoin's launch more than 10 years ago, Monero is completely different. It operates on an entirely different ledger system with remarkably different security features. A recent rise in its popularity has some people wondering if Monero will become the next big thing for online gambling.
A basic introduction to Monero
So what is Monero, exactly? Monero is an open source cryptocurrency represented by the symbol XMR on crypto exchanges. It is relatively new compared to Bitcoin, having been released in 2014. Users can trade coins or complete financial transactions in a completely secure and anonymous environment using any digital wallet that is compatible with the platform.
Like other cryptocurrencies, Monero is not considered legal tender in any country. Within those countries that do recognize it as a financial instrument, Monero is considered a security similar to stocks and bonds. So in the government's eyes, purchasing Monero is no different than buying your favorite stock.
The fact that Monero is not a recognized currency means that it is also not controlled by a central bank. It doesn't even have a tangible asset backing it up. That means the value of Monero is completely dependent on supply and demand. There is no central bank manipulating its value through interest rates, monetary policy, and so forth. It is worth what it's worth because users agree to it.
Online gambling with Monero
Using Monero as a vehicle for online gambling is no different, practically speaking, than using any other cryptocurrency. The gambler procures a digital wallet and purchases a certain amount of XMR through a recognized exchange. When that gambler is ready to make a deposit at a casino accepting Monero, he or she just chooses Monero as the banking option.
At that point, the gambler is prompted to enter the necessary information to complete the transfer. In so doing, he or she is pushing XMR to the casino rather than the casino pulling from the gambler. Push transactions are more secure because the recipient doesn't need any personal information in order to get paid.
For the record, not all Monero-accepting online casinos allow the platform for withdrawals. Where withdrawals are possible, the transaction is identical except that it goes in the opposite direction. Gamblers have to choose some other withdrawal option when playing in a casino that does not allow Monero withdrawals.
What makes Monero different
Thus far, we haven't discussed anything that would necessarily make Monero a better option for online gambling than another cryptocurrency. But that is only because we haven't discussed what makes it so different. As you read the following information, understand that Coinbet.com doesn't take an official position endorsing Monero over any other cryptocurrency.
With that out of the way, the first difference between Monero and most other cryptocurrencies is its architecture. All cryptocurrencies are really nothing more than computer code built to generate transactions and then keep records of them. Bitcoin was built on its own blockchain architecture. Most other cryptocurrencies are also built on a similar blockchain. Monero's blockchain is different.
Monero's code is based on the CryptoNight proof-of-work hash algorithm which, itself, is based on a protocol known as CryptoNote. Without getting into all the implications of what that means, the biggest difference between the two technologies can be boiled down to anonymity.
Where Bitcoin and its derivatives use a distributed public ledger relying almost entirely on encryption to maintain anonymity, Monero uses an obfuscated public ledger. Both ledgers can be publicly broadcast and received. The difference is in how ledger data can be used.
Bitcoin's blockchain allows anyone who has a copy of the ledger to see transaction amounts, sources, and destinations. While it is true that buyers and sellers are protected by encrypted digital keys, all it would take to cause problems is for one party in a transaction to inadvertently reveal his or her address.
Monero's obfuscated public ledger hides transaction amounts, sources, and destinations. Anyone looking at the ledger can tell a transaction has taken place, but no other information is available. Only miners with the right kind of computer equipment and cryptography knowledge can decrypt transactions enough to finalize them. But even at that, miners still cannot uncover destinations. Only senders and receivers have that knowledge.
This makes mining a lot more difficult and resource-intense. To reward miners for putting in the time and financial investment, Monero compensates them with incentives that allow them to earn more coins as a result of their work.
What this means to online gambling
This post came with a suggestion that Monero could become the next big thing in online gambling. By now you probably want to know why. There are plenty of reasons, beginning with the fact that Monero is inherently more secure. That is big for both casino operators and gamblers alike.
All cryptocurrencies are significantly more secure than traditional banking options. There is no argument about that. But it is still possible to hack something like Bitcoin, and it has happened in the past. Cryptocurrency systems have been hacked and coins stolen. You could theoretically hack Monero as well but doing so is exponentially more difficult.
Monero is considered one of the most secure cryptocurrency platforms on the net. It is so secure that there are cryptocurrency miners out there who use it to mine other currencies. In other words, they use the Monero platform to mine Bitcoin, Litecoin, Bitcoin Cash, and others. That says something about Monero's security.
This additional security makes online casino operators a lot more comfortable. They can deal in XMR with the knowledge that everything they and their customers are doing is completely anonymous to outside sources. But that's not all. There are a few more reasons Monero could become the next big thing in online gambling:
Circumventing government restraints
There are plenty of places around the world where online gambling is either severely restricted or banned outright. It is not our place to say whether anti-gambling regulations are a good thing or not. That is up to various governments and the people from which they derive their authority. With all that said, we are fully aware that there are gamblers willing to circumvent regulations in order to do what they want to do.
Monero represents a way to do just that. Because of its architecture and high level of autonomy, it would be nearly impossible for government authorities to crack down on gamblers who choose to use the system for online betting. Likewise, betting site operators are protected by the fact that Monero is untraceable.
Monero is fungible
Monero developers intended the cryptocurrency to be fungible from day one. A fungible asset is one that retains the same value regardless of the form it takes. Gold is a good example. An ounce of gold is worth the same amount whether in the form of a coin, a certificate, or a piece of jewelry. One ounce of gold is an ounce of gold. Monero works the same way.
Because Monero is fungible, neither cryptocurrency exchanges nor merchants can blacklist Monero units that may be associated with previous transactions. A unit is a unit is a unit, regardless of how it makes it into the account of the recipient. Why does this matter? Because there is some volatility involved in cryptocurrency transactions.
Monero is less prone to volatility associated with questionable transactions. That makes it more stable in terms of its value. If there is one thing we know about online gambling sites and cryptocurrency it is the fact that site owners want stability. If they are going to accept crypto, they want to be reasonably assured that they are not risking heavy losses due to instability.
No third parties are required
One last reason that online gamblers are excited about Monero is the fact that no third parties are required. Users can avail themselves of third-party transaction processors, but there is absolutely no need to do so. A user can go right to the Monero website, download the Monero software, and install it on his or her computer.
With the software installed, the user can visit an exchange to make that first Monero purchase. He or she can also use the software to make a Monero deposit at an online casino site. Everything takes place between the user and the casino without any intermediaries. This makes Monero a private means of conducting financial transactions.
There is a lot to love about Monero as a cryptocurrency. The many differences between it and other cryptocurrencies are undoubtedly driving its current rise in popularity. Will it become the next big thing in online gambling? We can't say, but I would not be surprised if it does.