The cryptocurrency and blockchain technology space moves at an incredible speed – and Ethereum casinos are no different. In what started with a couple of fly-by platforms has since grown into a huge industry in its own right. Crucially, there are now heaps of Ethereum casinos to choose from moving into 2020’s and beyond. With that said, if you’re yet to experience an Ethereum casino yourself, the arena can feel like the Wild West at first glance. Not only is it challenging to know which platform to go with, but figuring out the ins and outs of payments, bet sizes, and Provably Fair can be a challenge. As such, we would suggest reading our Ultimate Ethereum Casino Guide before taking the plunge. Within it, we cover everything you need to know – such as how Ethereum casinos work, how they compare to traditional fiat platforms, and what innovations we should expect.
How Does an Ethereum Casino Work?
If you’re here reading this guide, then it’s likely that you never placed a bet at an Ethereum casino site before. Moreover, it’s also likely that you are unaware of the many benefits that Ethereum casinos offer over their fiat counterparts, so it’s worth giving you a brief overview of why you might choose to make the transition.
No ID? No Problem – Most Ethereum Casinos are 100% Anonymous
If you’ve previously gambled at a traditional online casino, then you’ll know first hand just how bureaucratic the process is. Not only are you required to submit heaps of personal information – such as your first and last name, home address, and date of birth, but you also need to verify this in the form of identification.
While this has been forced upon online casinos through domestic and regional legislation, it means that you will be required to upload a copy of your ID before a withdrawal can be made. This is highly intrusive, as you shouldn’t need to provide sensitive documents just to be able to gamble your own hard-earned money.
With that being said, Ethereum casinos still allow you to gamble in an anonymous manner. As such, the initial registration process will only ask for an email, which is required in the event that you forget your login credentials. Crucially, you won’t be asked to upload any documents, period.
Payments are (Nearly) Instant
When using a debit/credit card or e-wallet at a traditional online casino, in the vast majority of cases the deposit will be applied to your account instantly. This is great, as you can gamble at the click of a button without encountering any delays.
However, what about the withdrawal process? If you’ve never gambled online before, you should know that traditional fiat casinos take days to process withdrawals. Once they do, you then need to wait for the respective payment issuer to credit your account, which in itself can add an additional 2-3 days.
This is in stark contrast to Ethereum casinos, which typically process withdrawal requests autonomously. In other words, as soon as you request a cashout, the Ethereum casino will automatically transfer the funds to your private wallet. With Ethereum block times taking just 16 seconds to validate, you’ll likely have the funds in your wallet in less than a minute.
House-Edges are Getting Tighter
The house-edge will dictate how much of an advantage a particular casino game has over you. In the case of gambling games that are facilitated by software, developers have the capacity to stipulate the house-edge that they wish to install. For example, if you find yourself playing online slots, the house-edge is represented by the RTP (Return-to-Player) – which can be as high or as low as the developer wishes.
It will come as no surprise to learn that the house-edge is getting more and more adverse for players, not least because ever-growing regulatory commitments are forcing traditional casinos to pass these costs on to the end-user.
However, Ethereum casinos are not bound by the same red-tape as their fiat counterparts, so you’ll often find that the house-edge on games are much more favourable. This is yet another reason why more and more players are making the transition from traditional online casinos over to that of an Ethereum gambling site.
Gaming Outcomes are 100% True and Fair
An additional – and perhaps most important, advantage of using an Ethereum casino is that gaming outcomes are 100% true and fair – meaning that the platform cannot engage in malpractice. This is because of a cryptographic protocol known as’ Probably Fair’. In its most basic form, Probably Fair allows casinos to generate a gaming outcome in a decentralized manner.
The process takes a seed from the player, a seed from the casino, and then merges the two together to form a random number. This number then has the capacity to generate a gaming outcome. The underlying Provably Fair generation process is transparent, so players can verify its authenticity at any given time.
Moreover, the cryptographic nature of the technology ensures that the outcome cannot be manipulated by either the player or the casino. As such, you can rest assured that Ethereum casinos always play fair.
How to Gamble at an Ethereum Casino?
So now that you have an understanding of why Ethereum casinos are consistently growing their customer base year-on-year, we are now going to outline how you can get started today. The following guidelines remain constant regardless of which Ethereum casino you decide to use.
Step 1: Choose an Ethereum Casino
First and foremost, you will need to choose an Ethereum casino that meets your gambling needs. In order to do this, you need to think about what you are looking for in an online gambling site. For example, are you looking for a platform that offers thousands of games, or are you more concerned with withdrawal times?
Either way, you are best advised to perform some independent research on the Ethereum casino prior to opening an account. The due diligence process should include metrics such as:
- Type of games hosted by the casino
- The extensiveness of the gaming suite
- Whether instant deposits and withdrawals are facilitated
- How long the casino has been operational
- What public reviews of the casino are like
- What bonuses the casino offers
- Whether a VIP program is in place
If you don’t have the required time to research your own Ethereum casino, it might be worth considering some of the platforms we have recommended on this page.
Each recommendation is based on the experiences of our in-house reviewers. Each reviewer has personally opened an account with the Ethereum casino in question – so you can be sure that the platform meets our stringent criteria.
Step 2: Open an Account With Your Chosen Ethereum Casino
Once you have chosen an Ethereum casino that meets your individual gambling needs, you will then need to open an account. If you’ve read our guide up to this point, then you’ll know that the casino will ask for nothing other than an email address, username, and password. Other than that, you will be able to gamble 100% anonymously.
Step 3: Deposit ETH Into Your Ethereum Casino Account
Now that you have opened an account with your chosen Ethereum casino, you will need to deposit some funds. The process works largely the same as depositing funds into a third-party cryptocurrency exchange. As such, you will need to obtain your unique deposit address from the casino, and then head over to your private Ethereum wallet.
Paste the deposit address into the wallet, enter the amount of ETH that you wish to transfer, and confirm the transaction. In most cases, the funds should show up in your Ethereum casino account in less than a minute.
Step 4: Gamble Responsibly
As soon as your Ethereum casino account has been funded, you can then start gambling straightaway. Whether its table games like roulette and blackjack, slots, progressive jackpots, or video poker – you’ll likely have thousands of independent games to choose from.
With that being said, you need to ensure that you gamble responsibly at all times. Never wager more than you can afford to lose, and consider self-excluding yourself if your gambling starts to get out of control.
Ethereum Casinos: Current State of Play
As great as Ethereum casinos are – especially in comparison to their fiat counterparts, it is important to note that the space still has its flaws. Crucially, the crypto-centric gambling industry is still in its infancy, so there are many improvements to look forward to moving into the 2020’s and beyond.
To illustrate how we envision the Ethereum casino arena to progress over the next few years, check out the following potentialities.
Problem 1: Scalability Limits
One of the overarching flaws of the Ethereum casino space is that of the underlying blockchain’s inability to scale a large number of transactions. At the time of writing, the blockchain is still limited to just 16 transactions per second (T/Ps), which is nowhere near the type of capacity an online gambling sector needs to thrive.
To put these flaws into perspective, the likes of PayPal and Visa typically handle around 115 T/Ps and 1,700 T/Ps, respectively. However, the aforementioned payment systems have the capacity to handle much more than this should they need to. In fact, Visa itself notes that it has the capacity to facilitate a throughput of 65,000 T/Ps – which is more than 40,000% more than Ethereum.
So what is the impact of such a low scalability threshold on Ethereum casinos? Well, it is important to recognize that each and every gaming outcome is based on an independent transaction. As we briefly noted earlier, this is based on Provably Fair technology, which requires a seed from both the player and the casino to generate a gaming outcome.
However, every time the technology does this, it requires a separate transaction on the Ethereum blockchain. With the blockchain capped to a maximum capacity of 16 T/Ps, this has the undesired effect of clogging up the system. As Ethereum casinos become more and more popular, this will ultimately lead to increased transaction fees – which is a precursor of increased network demand.
Solution 1: Ethereum 2.0
The solution to the aforementioned woes is ‘Ethereum 2.0’. For those unaware, Ethereum 2.0 is a project that the core developers at the Ethereum Foundation have been working on for a number of years. With the project being in the pipeline for so long now, it appeared that Ethereum 2.0 was never going to come to fruition.
However, it is rumoured that the project will eventually go live, which is great news for Ethereum casinos. In a nutshell, the network upgrade will increase the blockchain’s scalability capacity. While it remains to be seen what the exact increase will amount to, developers at Ethereum note that this could be as high as 4,000 T/Ps in a “best-case scenario”.
This would be more than sufficient to cover the demands of an ever-growing Ethereum casino space – especially when you consider that Visa – the world’s largest payment processor, averages a throughput of “just” 1,700 T/Ps.
Problem 2: Ethereum Casinos are not Decentralized
The second flaw that we expect the industry to address is that most Ethereum casinos are not decentralized. Instead, platforms are governed by third-party operators. This is absolutely fundamental in the discussion of Ethereum casinos, as the industry needs to follow the core principle of the underlying ecosystem – “code is king”.
In other words, the Ethereum network is decentralized in its entirety, meaning that the ecosystem is not controlled by a single authority, nor is it backed by any government or nation-state. If it was, then the network would operate much the same as any other centralized system. Instead, transactions are verified by independent miners, who are then rewarded for their time in the form of newly minted ETH.
In the case of Ethereum casinos, the platform itself will be controlled by a third-party. While games may well be backed by Provably Fair technology, Ethereum casinos still have the final say on withdrawals. This means that in effect, the Ethereum casino could refuse to honour a winning bet by blocking the player’s ability to make a cashout. While we are yet to encounter any instances of this happening, this isn’t to say that it won’t.
Solution 2: Decentralized Ethereum Casinos are Coming
Without attempting to state the obvious, the overarching solution to centralized Ethereum casinos is that of decentralized Ethereum casinos. This is something that we expect to see take off as a number of platforms are already in the making.
For those unaware, a decentralized Ethereum casino does exactly what it says on the tin – the platform is not controlled by a single person or authority. On the contrary, the entire gambling ecosystem operates in an autonomous manner. In order to achieve this, Ethereum casinos must go through a complete sea change in how bets are facilitated.
Instead of having a central ‘banker’ that collects deposits and processes withdrawals, this is a role that will eventually be undertaken by the Ethereum community. It can be somewhat challenging to get your head around such a revolutionary system, so we’ve outlined a quick example below to clear the mist.
- You are playing blackjack at a decentralized Ethereum casino.
- This means that there is no central bank to collect your stake.
- Instead, your stake is sent to the smart contract that governs the blackjack game autonomously.
- As is the case with all smart contracts on the Ethereum blockchain, the underlying terms of the code cannot be amended or changed – period.
- As such, only one of two things can happen. If the player loses, the stake is retained by the smart contract.
- If the player wins, then the smart contract transfers the stake and the winnings to the player’s private wallet.
On the one hand, the above example illustrates how an Ethereum casino can operate without needing the services of a centralized third-party. However, it doesn’t address how the smart contract is actually funded. After all, if the player wins a bet, somebody needs to cover the costs of the win.
This is where things get really interesting. Ethereum casinos that operate in a decentralized manner will allow anyone to back a gambling smart contract. In doing so, the community will have the opportunity to earn passive income, which is guaranteed by the house-edge that is inserted into the smart contract.
For example, let’s say that the house-edge on roulette is reduced to just 1.5%. This means that over the course of time, those that decide to bankroll the roulette game will be accustomed to a guaranteed long-term profit of 1.5%.
In fact, when you factor in the impact of poor decision making that some users implement when playing blackjack online, the passive income return is likely to be significantly higher.
Ethereum Casino: The Conclusion
In summary, the Ethereum casino space offers a number of core benefits over its fiat casino counterparts. Notably, this includes the ability to gamble anonymously – free from any requirement to upload ID, as well as instant deposits and withdrawals. Moreover, Ethereum casinos also facilitate lower-house edges, and guarantee fairness via Provably Fair technology.
However, as the industry is still in its infancy, Ethereum casinos have a lot of work to do. Crucially, this centres on an ability to scale more than 16 T/Ps, and the fact that Ethereum casinos are centrally governed. With that said, Ethereum 2.0 will pave the way for up to 4,000 transactions per second. Furthermore, we expect decentralized Ethereum casinos to become widespread over the course of the year, which solves the issue of centrally operated platforms.
All in all, there’s much to be excited about in the Ethereum casino space!