Question of the Day - 01 July 2025

Cryptocurrency gambling websites operate similarly to traditional online gambling platforms. The difference is they use cryptocurrencies, such as Bitcoin, Ethereum, Binance, and Tether, for all the transactions. 

Users sign up on the igaming platform, often with minimal personal information. That's one of the benefits of crypto gambling for some players: The crypto igaming sites prioritize anonymity. Many platforms don’t require Know Your Customer (KYC) verification, appealing to users seeking privacy, though this varies by jurisdiction and site. We'll discuss this and similar issues in Part 2 tomorrow. 

A crypto wallet is typically required to deposit and withdraw funds. This is software or a hardware device that allows users to manage and interact with their cryptocurrency holdings. It doesn't literally store the cryptocurrency itself; instead, it stores the private keys that grant access to and control over the corresponding addresses on the blockchain where the crypto is held. These keys are like digital signatures, enabling users to authorize transactions and manage assets. 

Just like with debit cards that transact with fiat currencies, players transfer cryptocurrency from their personal wallet to the gambling site’s wallet address. Transactions are recorded on the blockchain, ensuring transparency and security. Deposits are usually processed quickly, depending on the blockchain’s speed.

Then, players play. Same as always. They place their bets with the crypto on deposit. Winnings are credited to their account balance in the same cryptocurrency. Many platforms support multiple cryptocurrencies for betting. Withdrawals are processed via the blockchain, same as deposits; typically, the fees are lower and processing times faster than traditional banking methods.

Some platforms operate in unregulated or lightly regulated jurisdictions, which pose risks like fraud or unfair practices. Reputable sites, however, may hold licenses and use audited software to ensure fairness. Most use cryptographic "hashing," allowing players to verify game outcomes. 

So that's how they work, pretty much the same as any igaming site, except for the crypto transactions and blockchain tracking. Tomorrow, we'll tackle how big the market is and the challenges in regulating crypto gambling.