Everybody knows about Bitcoin, the cryptocurrency that started it all. However, the crypto world is much more than this digital asset; not all are the same. For the untrained eye, these currencies can honor their denomination as they are pretty cryptical.
This article aims to inform about Bitcoin and its biggest competitor, Ethereum while exploring if there’s a difference in the world of online casinos for gamblers. While they may belong to the same category and use the same base technology, they’re distinctive.
This, in turn, will help to understand other crypto-proposals better, especially when it comes to gambling.
How They Started
The leading digital asset worldwide was created by Satoshi Nakamoto and defined in 2008. It began circulating in 2009, and it stemmed from the financial crisis in 2008.
It gained massive adoption rates later on. One of the first to adopt Bitcoin was the iGaming industry. Casinos that only accepted Bitcoin appeared first, then moved on to take other cryptocurrencies.
Today, you can find this cryptocurrency available on many iGaming platforms. However, the experience might vary in each. This is why it’s recommended to use websites like Oddsjam that let you compare odds for sports betting and other sites for comparing casino offerings.
The history of Ethereum is more recent. It was developed by Vitalik Buterin in 2013 but started circulating in 2015. The objective was to create a decentralized payment network while using blockchain technology.
This is a significant difference: while the former was meant to replace fiat currency, the latter aimed to offer an underlying service or solution. It gained adoption fast, and casinos started incorporating it as quickly as they did with the most popular crypto asset.
What Are They About?
Both currencies are based on blockchain technology and can play a significant role in the online casino industry. It’s a network where all participants (computers) have an updated register of all changes.
This technology benefits casino games because it ensures transparency, as we’ll discover later.
In this respect, both assets work under the same principles. However, Ethereum can provide better “smart contracts” features than Bitcoin. This means developers can create decentralized apps more flexibly, including those related to online casino games.
Taking advantage of the blockchain, the “Provably fair” feature was developed. It allows players to check the fairness of games manually. This is because many casino games now use blockchain technology. The algorithm generates an encrypted key with the game’s results and sends it to the player. When the session ends, the player can verify the outcome.
This is a significant development because the information is shared across the blockchain network, making falsifying it almost impossible.
A Look at Their Efficiency
These two currencies couldn’t be more different regarding their operation in real-life situations. The advantage here goes to the Ethereum blockchain.
To start, block time is significantly better. It’s about 14 to 15 seconds against 10 minutes for the prevailing crypto-choice. This is important because it measures how long it takes validators to verify transactions and produce a new block.
This makes the newer network more efficient and allows faster transactions, a critical factor in the iGaming industry. When you pay with cryptocurrencies at an online casino, you want to start playing right away instead of waiting at least 10 minutes.
Also, the energy required for both blockchains is different. Bitcoin requires the equivalent of 3.2 million households, whereas Ethereum needs the energy equivalent of “only” 1.2 million homes to work. It makes the energy consumption much lower by comparison.
This is also considerable and aligns with the growing environmental concerns of many organizations, including the iGaming industry.
Proof-of-Work and Proof-of-Stake
Here lies a fundamental difference between both, which even has philosophical ramifications. Bitcoin uses a proof-of-work consensus mechanism, while Ethereum uses proof-of-stake, which can be important for online casinos. Let’s start with the first.
When you buy something, you pay in cash and get an item. The same goes for cryptocurrencies. For example, if you buy BTC, you pay with fiat money, such as USD, and get BTC. But how do you prove you actually get something in exchange if it’s all computational?
That information has to be stored in the blockchain as part of a block. When a block is closed, it must be verified with a 64-digit encrypted hexadecimal number. This is what miners actually do; they try to guess that number, which takes a lot of computing power and time. The blockchain rewards the miners who solve the number.
Proof-of-stake works differently. Coin owners offer their coins as collateral, or, better said, they “stake” their coins to participate in the validation process and earn a reward. The system randomizes how the validator is each time and who collects fees, so it’s not competitive, like proof-of-work.
This mechanism is much more suitable for validating transactions and ensuring fair play, which can have implications for online casinos if they make use of this tech for such purposes.
Some Possible Uses At Casinos
Up to this point, it might seem that Ethereum, and its asset Ether, are a better choice than BTC for online casinos. However, both are important in the gambling industry.
BTC is often called “digital gold.” Gold holders tend to hold it for the long term as a safeguard against inflation. Because of the high value of Bitcoin, it’s suitable for high-stakes gambling. It can also be helpful to store your winnings.
Ethereum, on the other hand, is more “fluid” and adaptable to the fast-paced nature of online gambling. It’s not just a platform for a currency but a network capable of offering software solutions such as decentralized finance apps, non-fungible tokens, and others.
Ether is a reward for those involved in the network, which could be integrated into loyalty programs or promotions. With faster processing times, it’s more similar to cash and thus allows for faster transactions.
Both are an excellent way for beginners to get into crypto casinos. If you’re intrigued, do your research and remember these digital tokens are highly volatile. Still, you might be partaking in the future of currency and online gambling.