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The cryptocurrency scene is proving its relevance with each passing day as it gets bigger. Digital currencies have become practical payment alternatives in a host of sectors, such as online gambling. A plethora of gambling websites now accepts different types of virtual coins for deposits and withdrawals. As the second-largest cryptocurrency by market capitalisation, Ethereum (ETH) is unsurprisingly one of the options available on these sites. Ethereum casinos have become quite popular, allowing players to bet on a myriad of games, ranging from slots to blackjack to scratch cards. Ever since gamblers began using digital currencies for real-money gaming, Ethereum has grown increasingly prominent.
If you are new to cryptocurrency gambling, you might wonder what makes Ethereum better than other coins. The Ethereum blockchain offers the same advantages as other typical cryptocurrencies but has something more – smart contracts. Learning what smart contracts contribute to crypto transactions is critical if you are to leverage Ethereum’s full potential. Since the blockchain is programmable, it offers more use cases than other networks. Ethereum can be tailored for a lot more than payments, and this guide explains what the technology means for users, including gamblers.
Using Ethereum in iGaming
Not many people know how Ethereum works beyond that it’s a cryptocurrency. The digital coin was designed on the original Bitcoin blockchain. Hence, it offers most of the same features. Ethereum exists on a decentralised network that records transactions on a series of shared computers. The ledger is public, enabling users to add data, but not remove it. This characteristic makes crypto payments immutable; they cannot be altered. Therefore, Ethereum payments are difficult to hack, providing users increased safety. Players can trust that their transactions are secure. If anyone wanted to change a record on the system, they would need to take control of most of the nodes on the network. For casinos, this trait reduces the risk of chargebacks.
Ethereum offers a private payment system where gamblers don’t have to reveal personal details during transactions. When depositing to withdrawing at Etherum casino sites, you only need your coin wallet address. As a peer-to-peer network, the ETH blockchain doesn’t involve an intermediary. Transactions occur directly between users. Cryptocurrency inherently lacks central control. Payments don’t require a bank’s or government’s authorisation, thereby decreasing waiting times considerably. Ethereum transactions take a few minutes. You can have funds in your casino account almost instantly and receive payouts quicker than most altcoins. Gambling with Ethereum is uncomplicated. Once you know how to buy and transfer coins, the rest is easy.
The Age of Smart Contracts
Perhaps you have come across the use of smart contracts in casino gaming, or are hearing about it for the first time. Whatever the case, you should know a few fundamentals about the technology and how it’s changing internet gambling. What are smart contracts? They are computer programs existing on the Ethereum blockchain that execute when a transaction occurs. A contract is an agreement. With cryptography, this agreement can be converted into computer code stored on the blockchain and activates immediately after the terms are fulfilled. Unlike a traditional contract, a smart contract is trustless. It doesn’t rely on trust to execute their functions.
These programs are the main difference between Ethereum and other digital currencies. Smart contracts turn the Ethereum network into more than a payment system. They enable the development of decentralised apps, or dapps, on the blockchain. Smart contracts run logically on an if-this-then-that basis. It means they do what they are structured to do. You cannot alter a smart contract. The programmed code defines the function without the need for human intervention. Automatic execution is the unique selling point of this technology. As long as the contract conditions are met, outputs are generated automatically.
Smart Contracts and iGaming
How do smart contracts fit into online gambling? One is improving the security of deposits. The programs facilitate transactions at coin exchanges. Conventionally, if you wanted to acquire Ethereum, you buy it from a cryptocurrency exchange service and store the coins in a wallet. When playing at an ETH casino, you have to move funds from the wallet to the gambling site. If you lose the private key to your wallet, your coins are lost forever. Smart contracts allow you to deposit digital assets directly on the blockchain, eliminating the need for a key. The code can be set to execute a transfer of funds from the player to the casino.
Another way smart contracts improve online gambling is by streamlining the payout process. When using fiat, or digital currencies other than Ethereum, you have to trust the operator will pay you when you withdraw funds. In some cases, online casinos refuse to honour payouts. Smart contracts get rid of this risk. A contract can be designed to work out cashouts after a customer has finished playing. Some of the conditions can include verifying results to ensure they are accurate. It means as long as you satisfy the terms, the contract will pay out the required funds.
Game fairness is perhaps the most crucial element of gambling on Ethereum smart contracts. As with most players, you want to be certain casino games are fair. Due to their public nature, smart contracts let you verify records. Asset transfer and other related details are readily available for audit. Therefore, you can prove that a contract did what it was programmed to do. When you bet on a game, you can check where the money went. Smart contracts contribute to provable fairness, thus building confidence between a player and casino.
Smart contracts are integral to the Etherum network. The ability of the blockchain to hold automated contracts is one reason it’s ideal for online gambling. Smart contracts provide secure and reliable transactions, thus reducing common risks for players. With smart contracts, you don’t need to rely on a third party to execute an agreement.
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