The evolution of cybercurriencies has been an evolving process but the first widely used cryptocurrency to become available for popular use came on the market less than a decade ago. Since that time numerous cybercurrencies have emerged, making it easy to make and accept payments anonymously. Users take advantage of these cryptocurrencies to make payments for a wide variety of goods and services including to the online casino, for ticket sales, for online shopping and even for tax payments.
Some of the online casinos have taken advantage of the currency’s popularity while others are holding off, worried about the legalities of the secretive currencies and security issues.
History of Cryptocurrencies
Cyptocurrencies are digital assets that are designed to facilitate exchange of financial assets via cryptography. The cryptocurrency controls the creation of additional units and verifies the transfers of the assets. Control is decentralized and is not dependent on any central banking system.
Cryptocurrencies were first conceived in the ‘80s and in the ‘90s the idea developed further. The concept of an anonymous, distributed electronic cash system remained theoretical until 2009 when the first cybercurrency was created for general use. By 2011, Litecoin, a cryptocurrency that used scrypt, and Peercoin, which operated by proof-of-stake, started to operate.
Today many governments are coming around to the idea that there is a currency that they don’t control. Legisation is slowly being developed in most Western countries to monitor and exert a measure of control over transactions that are effected through cybercurrencies.
Casinos and Cybercurrencies
Many businesses, including online casinos, weigh the pros and cons of accepting cryptocurrency payments. While such payments can be helpful to players, there are significant security and legal issues that the casinos must take into account.
Some of the issues that casinos consider when deciding whether or not to accept cryptocurrency payments include:
- Users rely on private and secure transactions that are guaranteed for safety via platforms that have been built from the bottom up.
- Cryptocurrencies are legal in almost every country in the world. Most countries have declined to take a stand on cryptocurrencies -- in essence, leaving such currencies unregulated yet free for citizens to use them.
- Fees for transactions that take place using cryptocurrencies are generally lower than those that take place using other e-payment plans such as Neteller, Paypal, Skrill, etc.
- The process of “mining” cybercurrency units (securing transactions using a cryptocurrency) is open to anyone with access to the internet and a computer.
- If you use cybercurrencies for your gaming activities you can use the winnings for investments, including investing in the cybercurrency itself. Cybercurrency investments are high-risk investments but also offer high-yield results.
- Since cybercurrencies are decentralized the value can’t be inflated or deflated by the decisions of any central government.
- The currency isn’t inflationary. Many of the currencies have a set number of coins that will be created and when those coins have been mined, no other coins can be introduced.
- Transactions are quick and permanent.
- It’s extremely difficult to fake transactions so it’s almost impossible to commit cybercurrency fraud. This is one of the main security issues with which the banks must contend often, while it is almost unknown in the world of cybercurrency.
- Cybercurrencies offer users the ability to complete transactions that are almost entirely private. Investigators, governments and other entities find it difficult, if not impossible, to track cybercurrency transactions.
- One of the most widely cited benefits of cybercurrency usage, its privacy, is also one of the biggest problems. It’s easier for individuals to engage in illicit financial dealings using untracable cybercurrencies. People can avoid paying taxes on their income which is illegal throughout the world. Some merchants and vendors are wary of being part of such an operation.
- Groups who produce wallets and exchanges don’t always have tight security. This opens users up to possible breaches in their transactions.
- The value of the cybercurrency fuctuates widely. One day you may have a coin that’s worth $100 and the next day it could be worth $1000 -- or $1.
- Since the value of cybercurrencies isn’t clear it’s not clear about the taxes that need to be paid on these funds. Some tax experts say that you need to pay based on what the coins were worth when you achieved then while others say that it depends on what the coins are worth when you file.
- Cybercurrency payments aren’t accepted by all -- or even most -- vendors. That means that you might be stuck with funds in your wallet for which you have no use.
- Because of the wide fluctuations in a cybercurrency’s value, the fluctuations in the prices means that the money saved in transaction costs might be negligible.
- Cybercurrency mining (specifically in proof-of-work systems) is a CPU intensive process. It requires a large number of resources and expensive computers that can only be used for coin encryption and creation which is a drain on the user’s finances.
- The possibility exists for cybercurrencies to be used to fund illegal activities including blackmarket transactions. It’s true that such transactions can be effected using all types of currencies but cryptocurrency makes it easier to pull off such actions.
- There’s no central bank control to regulate cybercurrency so there’s no authority that can control its volatility. The markets’ can’t be corrected and there’s no central system in place that can protect the value of the currency.
- If there’s a coin is lost or if there’s a problem with a transaction there’s no way to dispute the cost or recover the money. There’s no way to rectify a loss if coins are stolen.
- Cryptocurrencies transactions are listed in a public ledger. The ledger isn’t anonymous so people who shouldn’t have access to information about specific transactions may gain access to that information via the public ledger system.
- Cryptocurrencies lack the flexibility of centralize currency due to the non-inflationary nature of such cybercurrency.
For those who decide to utilize cybercurrencies, financial analysts suggest the following as the top cryptocurrencies:
Stellar was created by team of entrepreneurs, mathematicians and developers as a decentralized, hybrid blockchain. Stellar is fully open-source.
Ripple was launched in 2012 and, to date, has licensed its blockchain technology.
Most cybercurrencies employ a blockchain technology but Iota uses Tangle where there are no trading fees, mining or block systems. Transactions are validated by other users or nodes when the transaction is made. That means that every Iota owner is also an Iota miner.
Cardano is the newest cryptocurrency to be introduced into the marketplace but it already has 45 billion coins circulating around the world.Many users find this to be reassuring.