Understanding Stablecoin and Where to Find the Best Gambling Sites
Stablecoins are the latest phase in the efforts to bring cryptocurrency to new legitimacy. These coins achieve all of the benefits that digital coins can achieve with very little of the accompanying volatility. As a result, it seems like only a matter of time before Stablecoin gambling sites make serious inroads in the online gambling world.
In the past few years, gamblers have discovered how convenient and easy it was for them to fund their online gambling with cryptocurrency instead of using traditional methods like credit cards or bank cards. Not only that, using the coins provided them with unexpected benefits like privacy, security, low fees, and speed of settlement.
Some of the finest, most established gambling sites have added cryptocurrency to their methods of payment. Meanwhile, new sites have grown up that are entirely based on crypto.
The main problem with this setup is that even the top cryptocurrencies, such as Bitcoin, Ether, and Dash, are saddled with high volatility. This means that the value of the coins tends to rise and fall significantly and without warning. All of which makes gambling with the coins somewhat of an unstable proposition.
Yet you might be able to tell, from the very name, that Stablecoins offer a solution to this issue. That is because they generally are created with the intention of keeping their value at a relatively unwavering level. This is managed by either tying the coins to a stable asset like the United States Dollar or gold, or by some internal mechanism which adjusts the price when it starts to move too much in one direction.
As you might imagine, Stablecoins have really made progress over the last few years because of their ingenuity and their solid makeup. If adopted on a wide level, they can solve the problem of cryptocurrency being more of an investment vehicle instead of an actual replacement for physical currency. It also might lead to a boom in Stablecoin gambling sites from all corners of the internet.
In the following article, we will take an in-depth look at Stablecoins and explain how they work compared to other cryptocurrencies. We'll examine why the coins make for such an interesting alternative to other cryptocurrencies when it comes to online gambling. And we'll take a look at what you might be able to expect from Stablecoin gambling sites once they really start to take hold.
Cryptocurrency as Both Currency and Investment
The first cryptocurrency, Bitcoin, was created about a decade ago with the intent of it proving that you could make payments with non-physical, legal tender and have those transactions be trustworthy. This was achieved through a technology known as the blockchain. Without getting bogged down in the specifics of the blockchain, suffice it to say that it legitimizes and validates the transactions using Bitcoin and other cryptocurrencies without employing a third party.
Think about when you use your bank card. You have to sign up for a checking account first before getting to that step, and the bank is then privy to every transaction you make. It also has your vital personal information as well.
Credit cards require that same kind of surrender on behalf of the individual. And we put up with all of the fees and hassles that we are subject to when using these methods of payment because of the trust these institutions bring to your financial dealings.
Cryptocurrency achieves all of that without that need for the third party. It gives the user personal control of their finances again. Not to mention that it cuts down transaction fees and settlement times to an absolute minimum.
Yet, cryptocurrency has not quite made it to the point of being a viable alternative to regular currencies, in large part because it has become such a popular investment vehicle. People saw the potential of the coins in their early stages and stocked up on them. As a result, prices soared, more people came on board, and prices rose even higher.
Those prices have dropped off in the past year as there has been an expected correction in the market. Still, many people buy cryptocurrency without ever having the intention of using them as they were intended. Instead, they hold on to them as long-term investments or actively trade them as a day trader would stocks.
The end result of cryptocurrency being used more like an investment property than an actual payment system is the fact that the values for the coins are extremely volatile. Let's imagine a step-by-step example, as seen through the lens of internet gambling.
1 - You make the choice to fund your account with a certain cryptocurrency, and you decide that it's time to withdraw some of your winnings. The amount that you withdraw in these digital coins is equal to $1000. It goes back into your digital wallet.
2 - Just hours after you get the coins back, their value takes a 50 percent dip, leaving you with just $500 worth.
3 - Frustrated, you decide to put the remaining $500 worth of coins back in your account. You have a bad run and end up losing that money.
4 - The day after you lose it, the coins rise back up in value to their original level, but you don't enjoy this resurgence since the coins were used.
This is a bit of a harsh scenario, and it's not likely that you will encounter anything quite so drastic. And there's always the possibility that the prices could have worked in your favor. That is, the value of the coins could have risen when they were in your possession and plummeted once you deposited them into your account.
The bottom line is that there is very little stability for those who want to gamble with the coins. And these problems aren't limited to just gambling. What you might be able to understand from this example is that this problem can come up no matter how you choose to spend your cryptocurrency coins.
That's part of the reason why many businesses still shy away from offering goods and services for cryptocurrency, even with the saturation level of the coins on the rise. When you add in those people who only want to deal with the coins as investments, you can see why they are not quite fulfilling their potential as alternative currencies. But, that's why the notions of a Stablecoin and, in conjunction with that, Stablecoin gambling sites, are making such progress.
How Stablecoins Work
Let's go back to that other example. What if you could be relatively certain that the value of the coins that you were using for your gambling wasn't going to drastically change at any given moment? Suddenly you could use the coins in your gambling exploits without having to worry about volatility.
The coins that you withdrew would have been worth around $1,000 for a long period after getting it back. And you could put it back into your account without being concerned that the value of the coins would skyrocket the second they were no longer in your possession. That is what a Stablecoin can do.
How does it do that? Well, there is a number of ways. The most common of those is that the value of the coins are stabilized because they are tied up with the value of some underlying, stable asset.
Think about the United States dollar. When you spend or receive this currency, you can do so knowing that its value won't fluctuate much at all in a short period of time. This is because it's backed by a government that won't allow that to happen and takes measures to ensure that stability.
Of course, the dollar and other world currencies do move up and down in relation to each other. That is what creates the foreign exchange market. It's also why you have to trade in currencies when you are in a foreign market.
But established currencies of the world don't move drastically, in terms of their value, in a short period of time. That's why many of the most popular Stablecoins on the market, such as Tether and True USD, make their coins hew as closely as possible to the US dollar.
There are other ways that Stablecoins can achieve this stability. They include:
- You might be able to find a Stablecoin with gold as its underlying asset that determines the price. Venezuela used oil as the asset in question for a much-publicized form of Stablecoin. As long as the asset avoids great volatility, it can be a good basis for a Stablecoin venture.
- By backing a Stablecoin with a basket of cryptocurrencies, the issuers can prevent the volatility that might come with just one. It's the same concept that applies to someone diversifying a portfolio with many different assets. In this way, the coin issuers (DAI is the most popular of these coins) don't have to leave the realm of cryptocurrency to achieve the stability they want.
- Using smart contracts, which are another byproduct of blockchain technology, a coin issuer can adjust the value so that it never gets too high or too low. These contracts would act as the force which keeps volatility from creeping into the picture.
In some cases, these coins have the backing of actual collateral to do the stabilizing. Some other coins manage to keep prices level without any collateral. Regardless of how it's achieved, the goal of all these coins is generally the same: keeping coins at a level value in the short term and putting them in play more than investment-style coins could hope to be.
What Stablecoins Mean for Online Gambling
You might wonder how Stablecoin gambling sites would differ from typical gambling sites that are currently in existence. There are several different ways in which these sites could take shape:
- Most of the top gambling websites now include some sort of nod to cryptocurrency users. These sites allow for withdrawals and deposits in top coins like Bitcoin and Ether. Should Stablecoins continue to grow in popularity, it's likely these top sites would make room for these coins as the demand from gamblers would warrant it.
- There exists the possibility that certain sites will come into play which are strictly reserved for Stablecoins. These Stablecoin gambling sites would preclude any other method of depositing funds, such as credit cards or cryptocurrencies, that don't fall into the Stablecoin category.
- Think of how the coin Ether is used to fund applications on the Ethereum network. The possibility of some sort of Stablecoin fueling a network like this might mean that gamblers could partake in apps right on that network. That would allow them to only send funds for specific events instead of creating a specific account.
With these sites in place, gamblers could use Stablecoins to bet on their favorite sporting events. They might also be able to take part in casino gambling. Basically, if it's something that is included on a traditional gambling site, it can also be included on a Stablecoin gambling site.
We've already talked about how gambling with Stablecoins is advantageous to using other forms of cryptocurrency because of the stability of the value. But cryptocurrency contains many built-in advantages that gamblers should consider if they can find a site that will accept them for gambling purposes. These include:
- Speed of Settlement: By using cryptocurrency, you dramatically cut down the time it takes to deposit or withdraw funds into or from your account. This process can be messy and cumbersome anyway, due to the regulations imposed by these sites. Cryptocurrency can help speed up the process considerably.
- Freedom of Use: There are some credit cards and banks that won't allow their products to be associated with gambling sites. By the same token, these same entities will often deny business across borders. Cryptocurrency coins know no boundaries and are used at the discretion of the person in control of them.
- Limited Fees: Especially in the case of Stablecoins, which are relatively new and don't have networks as busy as Bitcoin, for example, the fees which accompany using the coins are minimal. Compare them to what it takes to pay credit card fees, and you'll notice a significant difference. It will help you to stretch out your gambling funds to a significant degree.
- Big Bonuses: As it's still early in the game for Stablecoins and dedicated Stablecoin gambling sites, you might not yet be able to realize these bonuses. But what will eventually happen is that gambling sites will realize the demand for these coins, as well as the benefits for their own business operations. When that occurs, you, the gambler, can expect to see great financial incentives to betting with the coins from gambling sites that want your business.
- Privacy Concerns: When you use cryptocurrency of any kind, you can essentially keep your identity free from the person or entity with which you are conducting business. As gambling can be a sensitive subject, this is a great benefit to those who want to fund an account. You can gamble without everyone knowing your business.
- Safe Funds: This is a huge benefit to spending money with cryptocurrency. Using a bank card or credit card means that your entire account is exposed each time you make even the smallest of transactions by those methods. By contrast, only the funds that, for example, you want to put into your gambling account will be made known when you use Stablecoins or any other form of cryptocurrency.
Up to this point, we've made it seem like a rosy picture for all potential Stablecoin gambling sites. But, in truth, there are some justifiable worries for gamblers entering this arena. For example:
- Less Versatility: Although you might enjoy the stability offered by Stablecoins, you won't have much of an opportunity to make big financial gains with the coins through investment. Using Bitcoin, or similar coins, gives you the opportunity to have it both ways. This you can do by keeping some for gambling purposes and tucking some away as an investment.
- Not as Established: Bitcoin has been around for ten years, and some of its top competitors have hung around nearly as long. By contrast, Stablecoins are only now finding their footing as alternatives to these coins. You might run the risk by buying Stablecoins that either can't keep their promises of value stabilization or, worse yet, will lose out to other competitors and go under.
- Lack of Choice: As we have mentioned throughout, Stablecoins are a relatively new creation, even compared to the young world of cryptocurrency. You won't yet be able to find a lot of gambling sites that offer exposure to the coins. That means you might have to go searching for sites to gamble on, some of which might be less than reputable.
When to Expect Stablecoin as a Viable Option for Gambling Sites
It seems like it's only a matter of time before Stablecoins become a serious competitor to traditional cryptocurrency coins as a method of funding gambling endeavors. For one, many governments are in the process of developing their own Stablecoins as a way to safely join the cryptocurrency craze and not jeopardize their markets.
On top of that, the last year or so has been a rocky one for traditional cryptocurrencies. More and more, regulators are getting involved as a way of trying to keep new coins from scamming unsuspecting users and investors. Meanwhile, the value of established coins continues to fluctuate wildly even as they sit well below their previous peaks.
In any case, Stablecoins are poised to gain ground as the traditional cryptocurrencies lose it. And, since crypto and gambling on the internet have always been closely associated, it seems natural that Stablecoins should jump into that void. When that happens, expect Stablecoin gambling sites to pop up with great frequency and immediately become a major factor in that realm.
Stablecoin gambling sites are still in the beginning stages, and Stablecoins in general have a long way to go to compete with Bitcoin, Ether, and some of the other coins that have already made impressive inroads in cryptocurrency gambling. And it's unlikely that they will completely eliminate those coins from consideration as methods of funding gambling exploits. But the near future should include a great increase in Stablecoin gambling sites, once gamblers and websites find out how beneficial these coins can really be.