There is already talk of the “blockchainization of culture” or similarly drastic effects of cryptocurrency on all of our lives. The fact is that the technology in question is penetrating more and more into everyday life. A new trend in the crypto industry is called GambleFi, which is conceptually a combination of the terms “gambling” and “finance”. This development marks the merging of gambling with blockchain technology.
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Specifically, the combination of these two markets is expected to reshape the gaming industry. Fast transactions or profit transfers without middlemen as well as a lot of transparency and security (naturally given by the blockchain) are strong arguments in favor of GambleFi. On the other hand, there is the common wild west mentality of the crypto industry, for laypeople, often opaque processes and difficult regulation of corresponding games.
It’s no secret that gambling, or online gambling, is a rapidly growing industry. Wherever there is a lot of money in circulation, cryptocurrencies and their technology are quickly represented. Of course, the crypto industry has long recognized the huge economic potential. According to Statista, the global value of online gambling is expected to increase to around 115 billion US dollars by 2028. It is already well above 50 billion US dollars.
There are hardly any limits to the range of uses of the blockchain. It can be used for slots, card games such as poker or online slots, other online games or sports betting and e-sports betting. It is even possible to base entire the best online casinos on the technology.
Together, blockchain technology and cryptocurrencies can ensure that online gambling will have more advantages in terms of convenience and security in the future. Depositing with cryptos for casino games or sports betting and then processing winnings withdrawals are just two of the many options.
For many players, it should be of particular interest that blockchain can be used to make incomparably fast and immediate transactions. Stakes can be transferred without intermediaries or accounts with specific gambling operators. Authentication is done via the crypto wallet.
The online games and bets provided on the basis of the blockchain benefit from security aspects similar to those known from other areas of application of the technology. Transparency, high hacker resistance and anonymity can be put forward as key factors. You always remain in direct possession of your assets and can move them without long waiting times. Connections to bank accounts or places of residence do not have to be established.
As is the case with almost all other technological breakthroughs, the crypto industry faces some not inconsiderable challenges when it comes to gambling. So it is still often like in the Wild West. The technologies and the products generated with them are not regulated. With all the security of the principle, this means an increased risk for the end users – in this case the players.
The competent authorities are also skeptical or fundamentally reject the crypto-gambling approach. In fact, not a single online casino in Europe is licensed that only offers cryptos as payment methods. Above all, the anonymity provided with this transaction method means that the responsible authorities – including the Joint Gaming Authority of the Federal States (GGL) – clearly refrain from permitting the corresponding means of payment.
In general, regulation with age restrictions and player protection measures would be difficult for games of chance that are completely based on the blockchain. The technology does not provide for the enforcement of such restrictions.
Similar to other crypto trends, GambleFi also holds great potential – both for the players and for the gambling industry. However, there are some significant uncertainties lurking in the shadows. In particular, the lack of an official regulation and the typical protective measures that are also not given can mean danger for players. The risks in question cannot be directly perceived, especially by beginners.
These requirements also mean that such a blockchain gambling market will only settle in the illegal sector. Just like the casinos and sports betting providers that let customers process payments with cryptocurrencies, complete blockchain offers will hardly be compatible with German laws.
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