Cryptocurrency: ground-breaking transaction method?
In a digital age it seems the logical next step for monetary systems to adopt a digital footprint. This next step in the evolution of currency is known as cryptocurrency.
What are cryptocurrencies?
A cryptocurrency is a form of digital currency that makes use of cryptography for information security and anti-counterfeiting purposes. Cryptography, derived from the Greek kryptos (meaning hidden), is the science of information security and uses various techniques to ensure that information sent via digital communication methods remains secure. In layman’s terms, cryptocurrencies are a highly secure digital transaction method. One of the most significant attractions of cryptocurrencies is that they are not associated with any particular country and, as a result, their value is not controlled by a centralised banking system. Instead, cryptocurrencies rely on consensus from their users to determine the currency’s value. In addition, much like precious metals, the value of cryptocurrencies is determined by market supply and demand.
5 things you need to know about cryptocurrencies:
- There is a huge number of cryptocurrencies – popular options include Bitcoin, Dogecoin, Mastercoin, Peercoin and Litecoin, with new contenders like Hashcoin, NXT, Globe, Omnicoin and RonPaulCoin and many more still just getting started
- More and more establishments are accepting cryptocurrencies – eBay, PayPal, Amazon and Apple’s App Store all accept Bitcoin, as well as, brick and mortar establishments like Dell, Kmart and Home Depot
- The creator of Bitcoin is a mystery – Satoshi Nakamoto is credited with a paper proposing Bitcoin in 2008, however as of yet no one has been able to track him down or even confirm that he is in fact a real person
- Cryptocurrencies are not legal in all countries – Iceland, Vietnam, and Bolivia restrict the use of cryptocurrencies completely, while China, Taiwan, India, Indonesia, Japan, Jordan, Lebanon, and Malaysia place certain restriction on how consumers can use these currencies
- Dogecoin’s origins – inspired by the popularity of an internet meme, that has become the cryptocurrency’s logo, Dogecoin was created by Billy Markus to reach a much broader demographic than Bitcoin
As with any innovation in online transactions methods, online casinos are often the first to adopt and take advantage of. This has never been truer than with cryptocurrency, a technological advancement that could, and to some extent already has, completely change the online casino industry. Cryptocurrencies allow for two major advantages for the online casino owner, namely the elimination of banking institutions in the transaction process, and the elimination of payment providers in the transaction process. The elimination of banking institutions The depositing and withdrawing of money from online casinos to banking institutions comes with exchange and transaction fees, as well as, delays in transfers. With cryptocurrencies, however, exchange and transaction fees are very low and transfers are completed almost instantaneously. This, as a result, reduces operating costs and raises profits for the online casino operator, as well as, saving the player money on each transaction. The elimination of third-party payment providers Many banking institutions, even in countries that have legalised online gambling, restrict transactions with online casinos making it difficult for players to make deposits and withdrawals. Third-party payment providers are used in such occasions as a middle man between the banking institution and the casino to improve successful depositing. For this service, payment providers take a small percentage of the transacted amount. Crytocurrencies, however, have no need for payment providers and as such allow players to retain the percentage of their deposit that would have normally been deducted. In the wake of the popularisation of cryptocurrencies and the benefits that they provide to online casino operators, cryptocurrency specific online casinos have started to surface. These casino are created to make use of cryptocurrencies and nothing else, even offering cryptocurrency specific welcome offers.
Last word on cryptocurrencies
As stated earlier, the value of cryptocurrencies is determined in much the same way as precious metals like gold and platinum. As a result, the value of these currencies is subject to fluctuation and some cases even a complete meltdown, as was in the case of Qubic, TimeKoinm Weeds, and Beertoken to name a few.