Bitcoin gambling is poised to take over an entire industry of high-cost incumbents, many of which who are yet to even consider the cryptocurrency as a banking method. This article sets out to explain just why the Bitcoin gambling industry is destined for success, and provides expert insight from Andreas Russell of bigcoingambling along with data gathered by TheBitcoinStrip.com.
Those who are familiar with Bitcoin will know that the price of the cryptoasset has increased dramatically in recent years. Bitcoin is being used as a safe haven asset for those looking to derisk from fiat currency systems, central banks and the issues that they entail (see Venezuela, India or Greece). But Bitcoin has also seen enormous growth in its use-case as a gambling currency, one which knocks down borders and regulations for everyone in the world, regardless of location. Triggered by the “Black Friday” events of April 2011, when online gambling was effectively outlawed in the USA, displaced gamblers sought out new routes to the online markets that they had once enjoyed. Bitcoin, as an anonymous and decentralized (no central authority) currency was the obvious option. The result has been a wave of new casinos entering the market, with over 200 Bitcoin casinos available to players at the time of publication.
The volume of casinos is telling, however data from TheBitcoinStrip.com has also shown enormous growth in the activity of players in the Bitcoin gambling sector.
At a current rate of roughly $1700/minute wagered at online Bitcoin casinos, we can estimate an absolute bottom range of the Bitcoin gambling market to be in the region of $13.5M annually (using an estimated 1.5% average house edge). Given that the data we collect only samples a handful of the most popular Bitcoin casinos and ignores dozens of Bitcoin poker sites, sportsbooks, and smaller casinos where the data is not available, the actual figure could reasonably run into the hundreds of millions. This figure is still a long way from where the traditional gambling market stands today, which was estimated by Morgan Stanley to be $423bn annually in 2014, but clearly Bitcoin gambling is on an upward trend, and we believe that this trend could turn hyperbolic.
Not too many gamblers are familiar with the idea of smart contract betting. The premise is simple but quite possibly revolutionary… Remove the casino operators and replace them with lines of code that automatically payout to the winner of the bet – no middlemen. This type of betting has only been made possible through the introduction of digital currencies like Bitcoin and Ethereum, where value can be programmed to move from one wallet to another without any possibility of interference. Whilst Ethereum is often the most talked about smart contract blockchain, Bitcoin is developing its own tools for handling such transactions through a project called Rootstock. These smart contracts have a few major implications:
This approach to Bitcoin gambling stands to revolutionize the industry. Imagine a casino which required zero trust by the player, where payouts and withdrawals were instant and transparent, and where bonuses did not require tedious live chat conversations or email threads. Smart contracts stand to dramatically improve the gambling experience, not just for existing Bitcoin bettors but for the traditional markets too.
There are a number of smart contract casinos already in development and some are live and ready for production. Here are a few to read about:
And in the not too distant future, BetKing.io will be relaunching as an Ethereum-based decentralized casino. Watch this space!
Sign up for exclusive bonuses from Thecryptostrip