Cryptocurrency or cryptos as they are popularly known are making their presence felt in every financial activity that takes place around the world. Cryptos are being used for making investments, placing anonymous bets, and also for carrying out high-value transactions.
However, if you are to understand why a crypto-based casino like SatoshiHero is popular you must understand the basics of blockchain.
In this blog post, you will learn about blockchain and how they affect the security of the transactions in a casino.
How Casinos Threaten An Individual’s Privacy
Data that is shared at a casino can be stolen. Hackers can gain access to the databases of casinos and also to the personal information of casino users by cyber attacks like DDos, malware, and phishing.
Some of the most common cyber security threats that are witnessed in online casinos are discussed here.
- Distributed denial of service – In this sort of cyber security breach the network is flooded with information. There is so much information in a particular network that it is unable to handle the large data flow. This can result in the complete breakdown of services or widespread disruption.
- Phishing attacks– These attacks involve spurious links or emails which may be used to steal confidential financial information like credit card details. When someone clicks on a spurious link on the website of an online casino he may inadvertently give out critical data.
- Malware threats – A malware is nothing but spurious code. At times the website of a casino may be rigged and it may contain malware. So when a person logs onto the website of that casino he too may become a victim of a malware attack.
Thus visiting a casino that is based on cryptos (blockchain) is often seen as a safe alternative to a casino that uses credit cards or payment wallet details to receive or make payments to their users.
Crypto Casinos And Privacy
Cryptos are based on blockchain. A block is a collection of data that are linked to a previous block through an encrypted hash. The blockchain is saved on a large number of computers run by peers. Each block on a blockchain is validated by the people (peer reviewed) on the blockchain network. Therefore every transaction on the blockchain is decentralized.
So in place of the centralized control and verification of central banks and government agencies, the control of a blockchain is in the hands of peers. This decentralized approach gives anonymity to the users. This is one of the prime reasons why crypto-based casinos are popular among the people who love to visit online casinos.
Blockchain Based Currencies Do Not Have KYC Related Obligations
In a traditional casino, the initial deposit or win amount is paid through cash or online (credit card, debit card, payment wallet), etc. But in a crypto-based casino, the payment happens in cryptocurrencies. Since cryptos are decentralized they do not have KYC ( Know Your Customer) verification, which asks for personal information for identification.
Most central banks mandate KYC verification for all digital transactions so that all the links in a financial transaction can be traced. However since cryptos are not regulated by government agencies and KYC is not mandatory, people who do not like to divulge much information prefer going for crypto casino.
However, there is an obvious downside to these lax regulations. Most crypto casino are seen as a means of money laundering. Hence some crypto casino have also made KYC registration mandatory though they are not legally obligated to do so.
Data Surveillance Is Almost Impossible With Blockchain
Places like online casinos which are frequented by thousands of people are a treasure trove of data. Hence these places can be easily used for surveillance or hacking purposes.
But in a blockchain, each transaction is verified and each block is linked to the other blocks. A person cannot steal or remove a block. So chances of surveillance and data theft are minimized in a blockchain.
Privacy Tokens Can Be Used In Blockchains
Apart from the decentralized nature and the difficulty of stealing blocks, there are privacy tokens that can add another layer of protection. Privacy tokens cryptographically convert sensitive data into a non-sensitive one. When tokens are used a tokenization system reverses the non-sensitive data to make it readable. This way confidential data is secured during transactions to provide additional levels of security.
Privacy tokens allow people to check transactions while concealing some other forms of data.
Private Network Blockchains Add Another Layer Of Security
Blockchains can be operated on both a private and public network. However, a private network is more secure than a public one. Private blockchains require the grid administrator’s permission to write or read data on the network. Hence they add another layer of security over and above public networks.
Thus the common factor between public and private networks is that both of them offer data privacy. However, if people want to ensure data security as well they will go for a crypto that runs on a private network.
However, the most popular cryptocurrency, bitcoin, is run on a public network. Hence if you are looking for absolute security most of the casinos will fail as they run on public networks.
Thus at present blockchains provide a great deal of privacy and data security yet some loopholes remain. Future technologies like homomorphic encryption may be able to plug the loopholes that currently exist in the security infrastructure of blockchain technology.
Many modern online casinos offer payments in cryptos. They are popular because cryptocurrencies can be easily traded at an exchange or they can be invested for good returns. However, one of the main reasons why people like to visit blockchain-based casinos is because they offer a great deal of anonymity.
They do not have mandatory KYC compliance norms so they are away from the tight regulatory oversight of government agencies. Moreover, private networks, privacy tokens, and the peer review inherent in blockchain make data surveillance almost impossible. At present crypto- based casinos provide the highest amount of privacy. And the vulnerabilities that remain can be dealt with effectively as and when better encryption technology is developed.