Understanding Crypto Gaming – Are Payments Private?
One characteristic that makes cryptocurrency attractive for online gambling transactions is its supposed anonymity. Why ‘supposed?’ When Bitcoin was introduced, one of its USPs was that it provided private payments. It’s how the blockchain network drew associations to illicit activities. The notion was that even intelligence agencies could not track crypto payments. However, questions arose when the founder of the Silk Road, a Bitcoin black market, was arrested and convicted. Since then, currency holders have understood that paying with digital coins doesn’t guarantee anonymity. However, that doesn’t stop different coins from marketing themselves as the answers to consumer privacy concerns.
Not every person knows the degree of privacy that cryptocurrencies afford users. Beginners in crypto gambling might go in thinking their transactions are untraceable. The truth, however, is that it’s difficult for online payments to be completely anonymous. Granted, cryptocurrency might be harder to track than fiat, but it’s not impossible. If you are considering using virtual currencies to deposit and withdraw at online casinos, then learn how well your activities are hidden. Don’t make the mistake of diving feet first into Bitcoin gambling under the illusion that no one can monitor your payments.
Are Blockchain Transactions Traceable?
Contrary to what many people believe, cryptocurrency transactions are highly transparent. The blockchain network, which facilitates crypto payments, is a public, distributed network. Every transaction through a digital coin is permanently stored on the network. The details recorded in the system include the time, amount, the sender’s and recipient’s wallet addresses. When using digital currency, you have to get a wallet, which enables you to send and receive money. Your address is the only information necessary during payments. Each wallet creates a private key, but the minute you use it, it becomes visible on the blockchain.
Anyone with access to the ledger can track every payment that a particular address makes. Other users can also view the balance of a given wallet. However, the system doesn’t have a way of linking a wallet to an identity. It’s not to say that’s impossible, though. Originally, virtual currencies didn’t have Know Your Customer protocols for wallet owners. The situation is changing. Now coin exchanges and online casinos are implementing KYC requirements for users. You will also find that some of the top Crypto casinos reviewed have KYC and AML protocols, which regulators started implementing recently. Therefore, if your wallet is ever active, authorities can request your KYC documents and use them to trace you.
From this explanation, you understand your coin wallet cannot stay anonymous. Another aspect to consider is that technology is constantly advancing. In a few years, governments may find effective methods to track digital currency transactions. As virtual coins grow more popular, governments and regulators are showing an increased interest in the area. Since the blockchain is permanent, then all your gambling payments stay on the network. So, whenever those tools become a reality, your information will be right there for monitoring.
How to Improve Privacy
Even though your transactions are not entirely anonymous, you can do something to increase the privacy level. One is exercising caution with how you use your wallet. Experts recommend using a new coin wallet to receive payments. For example, every time you are cashing out at an online casino, get a different address from the one you used for deposits. Also, you can have multiple wallets for various purposes. If you use digital coins for more than gambling, then ensure your transactions are not from the same wallet. Doing this isolates your payments such that it’s impossible to tie them together.
Virtual currencies occur by a peer-to-peer network, which can allow IP logging by listening to transactions’ relays. Users can prevent that by using masking tools like Tor. Routing your payments through proxy servers decreases the chances of IP logging, thus, keeping your information safe.
Currency holders also have the option of mixing. The services merge transactions from different users, making it hard to trace a particular one. They receive and return the same amount of funds through independent addresses. The downside of mixing is that it relies on trust. You expect the mixing service not to steal or lose your money. You also have to trust that it won’t record your requests. Mixing is only suitable for small amounts. If your online gambling involves large transactions, then consider other techniques to boost privacy. Additionally, mixing services might be legal or not, depending on the jurisdiction. Therefore, make sure you find out more before using them.
Privacy Varies Across Currencies
One thing gamblers should keep in mind is that digital coins are not built the same. Hence, their anonymity is different. Bitcoin is highly popular, which is why it’s a top choice for online gambling. However, it is also one of the least private options. A lot of altcoins operate similarly to Bitcoin. They use a public ledger where addresses and their histories are transparent. Users can boost the anonymity of such coins through mixing as described above. Alternatively, you can look for currencies with enhanced privacy features. Zcash is a good example. The coin employs the zkSNARKs encryption technology to anonymise transactions. Monero, Verge and Dash are another currencies designed for privacy. If hiding your online gaming payments is a priority, then take the time to learn about the best coins to use. Even with privacy-oriented currencies, though, anonymity is only to a certain degree.
Bitcoin and altcoins remain practical solutions when looking to keep your gambling payments off the radar. However, comprehend the level of privacy you are getting. Know what to expect from different digital coins. Don’t gamble with virtual currencies under the impression that all your payments are anonymous. Presently, blockchain payments are traceable through wallet addresses. As technology advances and cryptocurrency becomes more popular, improvements could be made to boost privacy.