Over the past few years, cryptocurrency has skyrocketed in popularity, and many people are now using it as their main form of currency. However, there are huge risks associated with it, and as Elon Musk’s tweets continue to bring down Bitcoin, many have risked it all and lost it all.
Online gambling casinos and online poker houses also push users to play with cryptocurrency, even connecting to cryptocurrency exchanges to cash out earnings.
Is there a reason why so many people prefer to use cryptocurrency for online gambling, and what are the risks involved with crypto itself? The same high gamblers get from winning can also be applied to a hike in cryptocurrency values.
What is Cryptocurrency and Is It Like Gambling?
Cryptocurrency is a form of digital currency that can be exchanged online for goods and services, using a technology called blockchain, which manages records and transactions.
The oldest and most popular cryptocurrency is Bitcoin, but there are now others such as Litecoin and Ethereum.
A big reason why people gravitate towards cryptocurrency over traditional currency is because of the privacy and security that it offers, as well as the potential to increase their wealth.
Cryptocurrency in Online Gambling
If you’re involved in online gambling, then it’s likely that you’re already using cryptocurrency. There are many online gambling sites that accept crypto exclusively, whether it be for games or for sports betting.
Why is Crypto Used for Online Gambling?
- Anonymity: Some cryptocurrency casinos don’t require you to verify your identity before cashing out, offering the user complete anonymity. This also eliminates the risk of identity theft from hackers.
- No Third-Party Involved: With crypto, each transaction is encrypted and decentralized, meaning your money does not go through a bank, but goes directly to and from the casino.
- Transaction speed: withdrawals and deposits can be made much faster than through a traditional banking system. It also minimizes transaction fees on your earnings.
- You Can Go Global: Crypto casinos can accept players from any part of the world because governments cannot track the players if their money is not tied to a financial institution.
Is Trading Cryptocurrency Like Gambling?
In order to gamble using crypto, you must first buy crypto, and be familiar with how it works. Some would argue that investing in crypto is no different from gambling, while others would say that the two are vastly different. Billionaire investor Warren Buffett has been a longtime critic of cryptocurrencies, calling them “a gambling device.”
Similarities: Both gambling and crypto trading involve risk, since the immediate future of your money is unknown. In both cases, you are betting money in the hopes of making a profit, but you can’t predict whether you will win any money from gambling, nor can you predict the future price of Bitcoin.
Both can be addictive, and you can end up losing money if you aren’t careful. Crypto trading and gambling can also produce similar emotions, such as the “high” you get when you make a trade, and the depression that comes when the value of that currency drops.
Differences: Gambling is instant gratification, while crypto is a longer game. Cryptocurrency is not purely based on chance, and there is no “house edge” that you have to fight against.
While the only way to become rich from gambling is to win a jackpot (and not gamble away any more money), if you are strategic about your crypto decisions, you can make money through trading crypto.
Should You Trade Crypto if You Have a History of a Gambling Addiction?
If you have a history with irresponsible gambling, or have struggled with substance abuse in the past, then cryptocurrency is likely not the best path for you. You may be more likely to make risky decisions for the sake of feeling an adrenaline rush, and crypto trading can easily turn into a behavioral addiction.
Gambling therapist, Chris Burn says, “The high risk, fluctuating cryptocurrency market appeals to the problem gambler. It provides excitement and an escape from reality.”
If you find that you are constantly researching and trading cryptocurrencies or are compulsively checking the minute-by-minute fluctuations in the market, this may be a sign to take a step back from crypto trading.
Tips for Trading Crypto Responsibly
- Educate yourself before getting involved
- Don’t invest in something that you don’t understand
- Speak to someone with experience
- Don’t spend money that you don’t have or can’t afford to lose
- Set a time limit and stick to it
Are you struggling with online gambling addiction? At Algamus, we help men and women from all walks of life treat their gambling addiction as well as any underlying mental health disorders.
If you believe that you or a loved one may have a gambling problem, reach out to our counselors and we can help you build a life that is free from gambling.