Mahi Sall, Advisor, Fintech-Bank Partnerships, Payments and Financial Inclusivity
January 25th, 2023
Mahi Sall is the CEO & Founder of FinXpair, a Berlin-based strategic advisory boutique firm focu[...]
Why Are Crypto Payments Safer When You Play at an Online Casino?
Guest Post | Jan 10, 2023
Image: Pexels/David McBee
The popularity and usage of cryptocurrencies have increased significantly in the past few years. In today’s time, many merchants accept crypto payments—you can buy goods with crypto, trade them, pay for services, and much more.
In fact, since crypto is expected to recover in 2023, cryptocurrencies might be the best option for anyone looking to avoid using credit cards. In addition to being a safer option, cryptocurrencies have several advantages over credit card transfers, especially if you are looking to play at an online casino.
Crypto Payments vs. Credit Card Transfers
Security is one of the main concerns for anyone looking to play at an online casino. While most online casinos are reputable, licensed, and trustworthy, not many people are willing to leave their personal data and credit card information with a gambling establishment.
Because of that, Ethereum gambling has flourished in recent years, mainly because of Ethereum’s price, safety, and transaction speed.
Of course, if you need a tad more convincing, here’s what makes cryptocurrency payments safer than credit or debit cards.
Crypto Payments are Decentralized
Cryptocurrencies use a decentralized system known as the blockchain to record and process transactions. The transactions that occur on the blockchain do not require centralized financial institutions to process the transaction, making every cryptocurrency transaction peer-to-peer.
On the other hand, your everyday credit card transactions include four participants:
- the merchant
- the acquirer (financial institution that allows payments to the merchant)
- the issuer (the cardholder’s bank)
- the buyer
Since cryptocurrency transfers do not use third-party to verify the transaction, your data, such as your credit card number, CCV, and even your personal information, is not stored in data centers or centralized hubs, which are often susceptible to hacking, making crypto payments a safer option.
Blockchain Is Virtually Unhackable
Apart from eliminating the need for a third party and reducing data exposure, cryptocurrency transactions are also considered much safer because of how the blockchain is structured.
Namely, blockchain is a distributed ledger of information. All the information available on the blockchain is stored in blocks of data, which are interconnected, and spread across numerous nodes.
To prevent tampering with the data, each block is digitally signed with a hash, which is based on the contents of the record and all the other blocks on the blockchain and also serves to verify the legitimacy of every node.
For someone to change the information stored on a specific block, they would need to hack the majority of block nodes. While this is possible with the so-called 51% attack, such an attack is extremely difficult to achieve, and hackers have little incentive to even try it.
In addition, as more nodes appear on the blockchain, attacks like the 51% attack become even more difficult to carry out, which is why blockchain is considered virtually unhackable.
Simply put, by using cryptocurrency to play in an online casino, or anywhere else, for that matter, you eliminate the risk of having your credit card information stored in a data center and potentially stolen.
At the same time, since no personal information is used in crypto transactions, you also avoid risking identity theft, making crypto payments a far safer option for playing in online casinos.
Crypto Is Also Better for Playing in Online Casinos
Image: Pexels/Andrea Piacquadio
In addition to being a safer option, crypto is much more convenient than fiat for gambling online—it is faster, offers more privacy, and lower fees.
Credit Card Deposits Have Higher Fees
By making a deposit using a credit card, you may be susceptible to incurring late fees, interest charges, and even foreign transaction fees.
While online casinos usually do not charge a deposit or a withdrawal fee, most credit card issuers treat gambling-related transactions as a form of cash advance or cash equivalent and charge a cash advance fee, which is anywhere between 3% and 5% per transaction.
On the other hand, crypto casinos that do charge a fee usually charge a flat fee to cover the transaction costs, which is often negligible.
Crypto Transactions Take Less Time
As we mentioned earlier, your everyday credit or debit card transaction involves up to four participants, one of which is a financial institution. These institutions are centralized and have to conform to various laws and regulations.
Because of that, an online gambling transaction involving a credit card or bank transfer can take up to a few days to complete in some cases, especially if the transfer is international and involves several centralized institutions.
Furthermore, it gets even worse when you are withdrawing funds from the casino and you have to go through various KYC before you can withdraw the money from your account.
In contrast, cryptocurrency transactions take only a few minutes to complete. The speed depends mostly on the network traffic and the coin you use, which is why most players use coins like Ethereum or Bitcoin for online gambling.
Alternatives to Crypto Payments
Of course, if you are not a fan of cryptocurrencies and still want to avoid using a credit or a debit card, we have some good news for you—many reputable online casinos offer a wide variety of payments methods, such as e-wallets and prepaid cards and vouchers.
E-wallets are electronic wallets that allow you to store funds, which you can connect to a casino to make deposits rather than using your credit card. Of course, you would still have to use your credit card info to add funds to your e-wallet, which is a separate issue. However, if e-wallets sound like something you would prefer more, the most popular e-wallets you can find in online casinos are Skrill, Neteller, ecoPayz, and Yandex.
Additionally, you can purchase prepaid cards like Paysafecard, AstroPay, and Boleto and simply use the provided code to add funds to your account without going through all the fuss of creating multiple accounts.
The Bottom Line
Online casinos often accept various payment methods, so there is always a way to avoid using credit cards and leaving sensitive information at online casinos.
See: Crypto Payments Report 2022: How digital currencies are revolutionizing commerce, corporates and culture
However, out of all the methods, playing with cryptocurrency is by far the most secure option.
At the same time, playing at a crypto casino also comes with a few advantages, making cryptocurrencies an ideal form of payment when playing at online casinos.
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