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How Gambling Affects Cryptocurrencies

“A giant garbage dumpster. A crime.”

This is what the Minneapolis Federal Reserve President and the Department of justice called Bitcoin last weak, respectively. 

So it’s safe to say that BTC has had a difficult week. 

Early disclaimer: this isn’t all doom and gloom. Don’t worry. BTC prices haven’t plummeted since this news. Although they have dipped back down to just below the 10k-mark – as of the exact time of writing this. 

So, what is the latest news?

Steven Mnuchin, who has been known to parrot President Trump’s disdain for cryptos, recently spoke with the Senate Finance Committee and told them that the Financial Crimes Enforcement Network would release new regulations regarding cryptos and BTC. 

“We want to make sure that technology moves forward but, on the other hand, we want to make sure that cryptocurrencies aren’t used for the equivalent of old Swiss secret number bank accounts,” Mnuchin said, adding FinCEN and the Treasury Department more broadly are “spending a lot of time on this.”

Mnuchin, was previously on record that BTC would not be used in a decade and that it could be a risk to national security. So, it’s easily assumable that he is a central bank shill. But his statements regarding the lack of use of BTC and cryptos in the next ten years are unfounded and downright wrong. If anything, cryptos will be used more. 

With the advent of blockchain, and more and more people actually understanding what it is, consumers are starting to use cryptocurrencies for their online transactions more than ever. With hacking and online fraud becoming more prevalent, the security and anonymity provided by BTC make the digital monies increasingly attractive to the general public. 

Online Gambling isn’t going anywhere – no matter what anyone says. It has been around since the 90s and has lasted through harsh antigambling legislation. Now that it is getting legalized in many US states, cryptos use is only going to be strengthened.

Why?

For starters, because of the inherent security with blockchain. When sports investors are moving money in and out of sportsbooks, they can be sure that the transaction is recorded on the blockchain of their preferred cryptocurrency. This makes it nearly impossible for them to be double-charged or for any other errors. The sportsbook or any online shopping outlet for that matter, does not have or hold the user’s credit or banking information. This means that the site can never charge your account at-will nor will a security breach affect you in a detrimental fashion. 

On top of this, the speed of transfers and the low cost of moving money is another significant reason why cryptocurrencies are preferred by sportsbooks and online casinos. Normally, there are lengthy verification processes and depending on where you are located and where the betting outlet is located, spendy international transfer fees, such as swift fees or multiple 3rd party fees. For example, PayPal charges 2.9% of the total amount plus a flat rate of $.30. Skrill charges 1.9% up to $20.00 plus a $5.50 transaction fee. Neteller charges 1.45% after your one-time fee of 20% (minimum of $30 USD). So, moving money from your sportsbook with Netteller into your PayPal account can be quite costly. Swift fees are a flat $50.00. 

Another reason sportsbooks like JustBet whose main currency is BTC at the moment is due to the restrictive nature of federal laws on sports betting, American sports bettors have few choices when it comes to legal sportsbooks. With very few options, America’s legions of sports betting enthusiasts must place their wagers through offshore online sportsbooks.

But what about BTC?

Well, a BTC transaction costs around $0.40 to $0.69 depending on how fast you want a sufficient amount of confirmation. So, less than one dollar per transaction versus a percentage of the total transaction amount creates a clear winner each time. Plus, again, you are dealing with blockchain, so it is confirmed and validated hundreds of times. This eliminates the manual validation process which takes up a lot of time. In the past, when you wanted to get your money out of a specific betting site, it could take a week or longer. 

With BTC, the average confirmation and transfer time are roughly 10 to 12 minutes. Ok. that’s a huge perk. With 1.2 billion people who gamble and roughly 4 billion who do so at least once per year, we can safely say that online gaming helps to drive BTC and other cryptos. With the benefits of this form of payment and so many people who see – or will see– cryptos as a viable solution to their online betting transactions, we can easily deduce that Mnuchin is dead wrong. BTC and cryptos are not going anywhere any time soon.

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Qadir AK

Qadir Ak - Co-founder of Coinpedia Blog - His interest as crypto Author, Editor, Speaker at cryptocurrency conference has made him known as passionate blogger and startup in Asia.

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