The blockchain reshaped the way we think about money in general. But with multiple cryptocurrencies to choose from, things can get confusing.
Add to that the fact that using crypto isn’t all that intuitive for beginners, and on-chain transactions no longer sound like such an ideal solution. So how do we solve these inherent problems?
Understanding How On-Chain Transactions Work
To better understand how off-chain transactions work, we need to compare them to traditional on-chain transactions.
On-chain transactions work through the blockchain itself. When two parties exchange currencies, they need the approval of a suitable number of participants within the chain itself. Once the transaction has finished, the public ledger gets updated with the new number of coins available in the space.
Since this type of transaction broadcasts information to the whole network, it cannot be reversed. At least not by default. To reverse an on-chain transaction, the process needs the majority of the network’s hashing power to come to an agreement. This can make things a lot more complicated for newbies who tend to make mistakes.
Introducing Off-Chain Crypto Transactions
Off-chain transactions make it far easier for users to exchange coins between them without involving the whole chain.
There are a few ways of executing off-chain transactions:
Using a Third-Party
If two people who want to make a transaction don’t trust each other, they can use the services of a trusted third party.
PayPal and Revolut are the most popular services that offer cryptocurrency exchange directly from your debit or credit card. They allow you to purchase them directly from their platform and send the coins to the user of your choice.
Coupon-Based Mechanism
Some companies and casinos allow you to purchase coupons in exchange for cryptocurrencies. It’s a simple mechanism that makes the process a lot more understandable for the average user.
Exchanging Private Keys
You can create several wallets and split the amount between them. Afterward, you can exchange the private key to a certain wallet with the person of your choice. This way, you’ll avoid the small transaction fees that might usually occur in a classic on-chain transaction.
How Does This All Affect the Gambling Industry?
A trusted live casino product can offer you multiple ways of paying and cashing out your earnings.
You can choose to pay for your chips in crypto and then get your earnings out in fiat currencies. Pay either by card or through a third party. Vouchers or codes are also accepted thanks to other services such as PaySafe Card.
You get the point. Having off-chain transactions available can greatly ease how you manage your earnings. With a little foresight and research, you can even predict when’s the best time to use either crypto or fiat currencies.
However, it doesn’t stop there. This technology benefits you even if you opt to go to a physical casino. Since we’ve covered the basics of how off-chain transactions work, let’s look at other ways through which you can use cryptocurrencies in the gambling scene.
RFID and the Blockchain – a Match made in Heaven
Now you’re probably thinking that blockchain technology only works with cryptocurrencies. But that’s far from the truth.
Casinos have started implementing RFID chips instead of the regular plastic ones. They use these to monitor how much the wager is in a certain round of poker, for instance.
Similarly, you can use RFID technology to pay and receive earnings in cryptocurrencies. Physical bitcoin wallets are made for this exact purpose. Instead of storing your wallet and private key on a computer or website, you can just store it on an RFID-enabled chip.
Simply take your physical wallet with you in a casino and pay at the house with it. Afterward, you can collect your earnings on the same wallet. No PIN, no QR codes, no hassle. Just a regular-looking coin that you can use like a contactless bank card.
Privacy and the Ability to Play Internationally
Off-chain crypto gambling offers people the possibility to engage in the action of casinos from other countries.
Before the blockchain, you couldn’t legally gamble in another country’s online casino. If you wanted to, you had to get on a plane and travel there. The cost of transportation, hotels, and exchange rates would make the experience a flawed one.
However, things have changed for the better. Casinos operating on blockchain technology rarely force you to give state-mandated documents. Instead, you can just give your wallet address or pay an amount through one of the off-chain transaction methods we’ve talked about earlier.
In the same way, you can cash out your earnings in cryptocurrencies without having to deal with legal issues or obnoxiously high conversion rates.
The Bottom Line
Off-chain transactions make it easier for the end user to enjoy the benefits of cryptocurrencies. And since more casinos are adopting crypto, you can be sure that the gambling scene will change dramatically within the following years.
