Security and Fairness in Crypto Casinos: How Blockchain Technology Enhances Trust in Online Gambling

Financial experts believe the crypto gambling market will reach $93 billion by the end of 2023, almost twice its value in 2020. Bitcoin casinos are all the rage right now, taking over the entire online gambling market thanks to innovative features they brought to the table. Using blockchain technology, all transactions on BTC casinos are processed almost instantly, with little to no transaction costs. 

Moreover, blockchain technology gave new meaning to safety. When each block of data is added to the chain, the latest cryptography makes it immutable to hacker attacks. The fairness of games in BTC casinos is unquestionable, thanks to the provably fair systems in place.

Join us as we describe blockchain technology’s impact on online gambling and its future developments. 

The Role of Blockchain Technology in Crypto Casinos 

Blockchain technology is an open-sourced decentralized environment where blocks of data are linked together via cryptography to form a chain, hence the name “blockchain.” We can also see it as a digital ledger where every computer in the network confirms each transaction. 

As a decentralized ledger, there’s no one governing body influencing the price of cryptocurrencies that are based on blockchain technology. Also, it’s a distributive database, so multiple copies are saved on every machine, and they must all match in order to for the blockchain to be valid. 

In addition to not being controlled by the federal government, blockchain provides unprecedented transparency. Namely, each transaction on the chain is verifiable and visible to users through a personal node or by blockchain explorers that allow users to see transactions take place in real time.

After a new block of data is added to the end of the blockchain, previous blocks can’t be altered in any way, and the network rejects any attempts to change the blocks. Each time you make a payment on a crypto casino, you can rest assured the payment gateway has not been tampered with. 

Ensuring Provably Fair Games with Blockchain 

One of the most innovative features blockchain technology brought to the iGaming table is provably fair gaming. The provable fairness feature is, in fact, an algorithm that is used to analyze and verify the result of each casino game. It’s a cryptographic method that guarantees that the results of rounds are not affected by players’ bets.

Some game providers, like BGaming, pass the verification results to the player directly, so you don’t need to complete the check yourself. For other providers, you will need to get all three variables to do the check:

  • Server seed provided by the casino
  • Client seed supplied by your browser
  • A cryptographic value (nonce number) increases with every bet, so you know how many rounds have been played with those exact seeds. 

All data is hashed using the SHA-256 algorithm. To verify the results of previously played rounds, players need to insert the unhashed seed in an SHA-256 calculator and see if it matches the original hash provided before the initial round. 

Securing User Funds and Transactions 

The development of blockchain in the casino realm has led to the implementation of certain features, such as the use of smart contracts, that greatly facilitated Bitcoin casino security and safe and timely transactions. Smart contracts are programs on a blockchain that are automatically executed once certain conditions are met. 

For instance, when players win from playing slots, the funds are automatically transferred to the withdrawable balance, so all you need is to initiate the withdrawal from the Cashier section of your account. 

With smart contracts, there’s no need for human involvement in the process, which immediately decreases the chance of error. 

Blockchain’s block formation is in itself a firewall since each block is connected to the one before it, making it difficult to tamper with any one block. With its cryptographic infrastructure, blockchain denies illicit attempts for a change in the structure from anyone, even root users and admins, let alone hackers. 

KYC (Know Your Customer) and AML (Anti-Money Laundering) Compliance 

Casinos can leverage blockchain technology to create a more effective Know Your Customer process. Users will have to go through the process once and then have the data stored on the blockchain, the verification of which can be further shared with any financial institution. 

Moreover, the blockchain’s framework is immutable, so every single translation is recorded and impervious to change, which sets the stage for Anti-money Laundering compliance. With machine learning software, casinos and their regulators can detect suspicious activities and ensure no dirty money gets into circulation. 

However, the biggest problem is maintaining the balance between user anonymity and privacy that cryptocurrencies deliver and KYC policy. Even the regulated crypto casinos with licenses from Malta Gaming Authority and other jurisdictions sanction the use of cryptocurrency as long as players complete a successful KYC verification, which is in direct conflict with the privacy implied by cryptocurrency gambling. 

Decentralization and Trustlessness in Crypto Gambling 

Crypto casinos have put their stock into blockchain, which has paid dividends so far. With provably fair gaming, users are now confident that casinos have not affected the results of spins and game rounds in any way.

The transactions occur at lightning speeds and incur almost zero fees, not to mention complete protection from hacker attacks. With cryptocurrency payments, there are no mirror payment gateways and sharing personal banking details with the casino to complete a deposit or a withdrawal, which is necessary with e-wallets and other fiat payment methods. 

Conversely, once you execute a payment on a blockchain, there’s no way of reversing it. The immutable nature of the blockchain makes that impossible. Also, crypto exchanges are custodians of your private keys. If they fall victim to hacker attacks, so can your crypto assets, which still keep some players on the defensive regarding crypto transactions. 

Building Trust with Players 

Crypto casinos must share information about how they handle player transactions and the actions users must take to comply with the AML and KYC policies. Most sites will require a 1x wagering requirement of all deposits to comply with the AML rules. As for KYC policies, they primarily affect withdrawals. Bitcoin casinos usually impose a specific limit above which they will require you to submit personal documents and verify the account. 

Furthermore, before launching the games and all products, crypto casinos perform internal and External Compliance Testing (ECT) conducted by independent third-party auditors. Many of the operators are also members of the Crypto Gambling Foundation, which further contributes to their transparency and commitment to fair and safe gambling. 

The Road Ahead: Future Developments in Security and Fairness 

You can never overemphasize the importance of security in online gambling, and in that regard, blockchain has proven to be the most useful. With the use of smart contracts, casinos automate a lot of functions. 

Additionally, we’ve seen a growing number of decentralized casinos running exclusively on the blockchain through decentralized apps (Dapps), taking advantage of smart contracts and provably fair gaming, direct deposits and withdrawals, and many other features. 

The online gambling industry has been making strides in terms of security. SSL encryption, two-factor authentication, and biometric logins are some of the additional features operators have introduced in recent years, making gambling safer.


The status of cryptocurrencies is different across jurisdictions, impeding their growth in the iGaming industry. While some regulators object to using crypto altogether, others support it as long as operators can fulfill the AML and KYC requirements. Still, the advantages blockchain and cryptocurrencies entail are undeniable. Safe and secure payments, provably fair gaming, and more transparency are at the core of blockchain gambling, and it is only a matter of time before cryptos become even more widespread in the industry, especially with the rise of Metaverse and its gambling platforms.