In the Bitcoin network, the transaction processing speed very rarely goes higher than six transactions per second. The average speed has been about 3-4 transfers per second over the last year. Payment system VISA, by comparison, is known to process about 1,700 transactions per second.
This issue would not even be that evident if only a few thousand cryptography enthusiasts were using this cryptocurrency. But there are more than 460 million BTC addresses in the world today. The exact number of users is anyone’s guess. It is probably somewhere from several dozen to hundreds of millions of people. Such a user base poses a challenge not only for the network but also for the entire community.
The Bitcoin scalability problem comes from the limited size of a block of transactions. Every block is limited to 1 MB in size. This decision was made on the grounds of security and DDoS protection. However, this and other technical features have been the reason why it takes quite some time to add new transactions to the blockchain.
This issue has basically created a bunch of new cryptocurrencies. We are talking about Litecoin, Bitcoin Cash, and several other projects that were initially designed to make crypto transfers faster, cheaper, and more convenient. Such altcoins and hard forks did occasionally improve speed and other things, but neither of them was an adequate solution that would satisfy the community.
Meanwhile, there have been some more elegant ideas. One of these concepts is known as the Lightning Network, which is something like a superstructure for the Bitcoin network. Soft fork SegWit paved the way for the Lightning Network when it changed the BTC transaction format. Today you can see LN payments being slowly integrated on many exchanges and online resources, including casinos that accept bitcoin.
The Lightning Network and crypto casinos
Dozens of gaming websites have already made it possible to enjoy bitcoin gambling with payments through the Lightning Network. Some of them are listed on LightningNetworkStores. However, most of these resources are not verified yet so we cannot recommend them for a safe crypto gambling experience.
At the same time, there are several proven bitcoin casinos that allow you to use the Lightning Network for deposits and withdrawals. These BTC casinos have gained some recognition among players and built their reputations. You may want to check out these bitcoin gambling sites first and foremost.
Bitcoin casino Betplay declares itself as «The #1 Bitcoin Lightning Casino». They may really deserve such a title. Users of this crypto gaming website can make instant deposits with zero fees and expect about the same when requesting withdrawals.
This LN casino presents BTC games from 37 providers, including NetEnt, Play’n GO, Yggdrasil, QuickSpin, and Ezugi. Its game categories include video slots, table games, live casino, and Provably Fair games. There are not only blackjack, baccarat, roulette, and poker, but also relatively rare games like minesweeper or Plinko.
Betplay has its own client apps for personal computers, iOS, and Android. If you want to download one of them, just enter this crypto casino on the desired platform and click on the corresponding button in the top right corner of the page.
Thunderpick is a modern bitcoin sportsbook where you can bet on sports and e-sports using BTC. It also has a casino with all sorts of games. This crypto games site provides quick access to all categories of bitcoin sports betting and casino gambling.
Its game collection includes not only ubiquitous slots and video poker but also some exclusive games. Users can use bitcoin to play virtual soccer or rugby, scratch-off scratch cards, and roll the dice. They even can make crypto bets on how long a virtual plane will fly until it crashes.
Crypto sportsbook Thunderpick also offers rewards for those who invite new users to the bitcoin gaming site. It has a referral system that allows you to get 10-40% of the revenue earned on your referrals.
Bonuses in Lightning Network bitcoin casinos
The idea of fast and cheap transactions sounds great in and of itself. But crypto casinos also create special deals and promotions for their users to make gambling with Bitcoin Lightning Network even more fun.
Betplay offers a 200% bonus up to 0.05 BTC on the first deposit. The limit may look really low, but you would hardly succeed to make a bigger one-time transfer in the Lightning Network any time soon. The wagering requirement is 30x while the max bet is 0.001 BTC ($45-50).
Thunderpick provides a 5% bonus up to the equivalent of €500. This bonus should be played through only three times in order to turn it to cash. It is 10-20 times lower than in most bitcoin casinos.
Other deposit bonuses
Users of Betplay.io can get up to 0.02 BTC thanks to a 100% reload bonus on the deposits made with help of the Lightning Network. In this case, the wagering requirement would be 35x.
Crypto casino Thunderpick has a VIP club for high rollers accessible only by invitation. If you are a VIP member, you are going to get exclusive gifts and bonuses, priority withdrawals, zero fees, increased betting limits, personal manager, and other cool privileges.
What is the Lightning Network?
Lightning Network is a so-called layer 2 protocol for the Bitcoin network. The Lightning Network is designed to ensure fast, cheap, and private transactions. These improvements are achieved through smart contracts and payment channels.
How the Lightning Network works
In the case of regular transactions, BTC are directly transferred from one address to another. The Lightning Network has special channels for that purpose. Each channel is established between two addresses, and there are two transactions that are saved in the main Bitcoin network for each channel. One of them is opening a channel for two addresses, and the second one is closing it.
But it does not mean that you should necessarily have a channel between yourself and a resource if you want, say, to send money from your own address (A) to the address of a crypto casino (B). The Lightning Network has its name for a reason: payments can go through a mesh of multiple channels. For instance, a chain of channels for your payment can look like this:
• A <===> D
• D <===> G
• G <===> Y
• Y <===> B
Even though A and B do not have a common channel, there is a chain of nodes and channels that connects them in the Lightning Network. In that case, payment will go through this chain from address A to address B, passing through each intermediary node according to a smart contract. Meanwhile, these intermediary nodes will not even know that you are sending money through them.
There is one important thing, though. The bitcoins you send will successfully move through this chain only if each of the channels has at least the equivalent amount of your payment. If you want to top up your crypto casino account with a 0.01 BTC LN payment, each of the channels in the chain should have 0.01 BTC or more.
Lightning Network channels
The balance of a channel is set when the channel is created. It is determined by the opening transaction that would be stored in the Bitcoin blockchain. That is why the balance of a Lightning Network payment channel cannot be higher than the sum of cryptocurrency both parties have on their addresses. Either one or both parties can fund the starting amount of the channel. Payments can go in either one or both directions, too.
Furthermore, each of two parties can close their channel at any time. A smart contract will then conduct a closing transaction, saving it to the blockchain. Using the information about the initial and final balances of both parties, this transaction will basically combine all Lightning Network transactions into one transfer on the Bitcoin blockchain.
Transactions are not stored in the blockchain?
One of the important features of Bitcoin is that its transactions are grouped into blocks that are later saved to the blockchain. The current blockchain has information about all the transfers that have ever been made in this network. It cannot be modified or falsified, and it is often seen as a significant advantage over more traditional payment systems.
The main bulk of Lightning Network payments is conducted off-chain with help of smart contracts. The chain of blocks contains only those transactions that open and close LN channels. This way, it is possible to avoid delays related to the processing of each transfer. They are simply being carried out inside of the channels without any additional records.
Sometimes regular users do not even have to create any channels to take advantage of LN payments in crypto casino games. Some Lightning wallets offer users their own dedicated channels. Technically, the wallet provider would store user funds, but users would still be able to send, receive, and withdraw money.
Since such custodial services get access to your funds, you should probably be careful with them. Impeccable reputation and absence of unresolved complaints may help you choose a decent wallet for bitcoin casino Lightning Network payments.
More is better
As the Lightning Network gets more members, the mesh of channels expands and intertwines. It would not be necessary to create a new channel for payment, at least in many cases. The system would automatically find the shortest route through the network of channels from the initial sender to the final recipient.
Some places may try an experiment and allow you to pay for your meal using Bitcoin. It would usually bring along some inconveniences for both the business and the client. How long will it take to confirm the transaction? How much miner fees will you pay? How stable will the intermediary services be? Most people would find it much easier to pay with a card or cash.
Even though it is not as critical for cryptocurrency casino games, payment delays and high fees may still make you wonder about the alternatives. In the meantime, these issues will largely disappear or diminish once a fair number of crypto casinos start implementing Lightning Network payments — at least on the part of cryptocurrency.
Benefits of the Lightning Network in bitcoin casinos
The possibilities offered by the Lightning Network are quite appealing in many areas, including crypto casino gambling. This protocol has the potential to bring users back all those advantages that were initially promised (and provided) by Bitcoin. It only needs to get a proper amount of members and nodes. Below you will find the main benefits of the Lightning Network in cryptocurrency gambling.
Instant deposits and withdrawals
You do not need confirmation from the network when you make a Lightning Network transaction, as opposed to regular BTC transfers. Payments move through the channels instantly, getting to the recipient within moments. The payment data are saved to the Bitcoin blockchain only when one of the parties decides to close the channel.
We should mention that the network of channels might be too small to allow users to send money to their crypto casino accounts through already existing nodes, at least at the initial stage of LN development. In that case, a direct channel to the gambling site will solve the problem.
Saving on miner fees
In the main Bitcoin network, users are paying miners for the confirmation and formation of transaction blocks. The process of mining implies solving complex mathematical problems, large energy consumption, and things like that. When there are too many transactions, the cost of a transfer may soar to uncomfortable numbers.
How does the Lightning Network deal with all that? Individual LN payments are not stored in the blockchain, so the sender simply avoids paying miner fees. They are paid only when you open and close the channel.
The Lightning Network stipulates node fees, though. They are paid if your money is sent to the receiver through a chain of channels. But these amounts are intended to be really low — much lower than Bitcoin transaction fees.
If you deposit and withdraw money from a Lightning Network casino account regularly, it can make a big difference. Using Lightning Network payments, users would be able to save on transfers and spend less money on bitcoin casino games.
No transactions tracking
The idea of anonymous bitcoin gambling sounds quite appealing for many online gamblers. The Lightning Network allows you to add a whole new level of privacy to your transactions. Since transfers are not stored in the blockchain, marketing companies would not be able to monitor your preferences using special analytics software.
Bitcoin casino gambling buffs who are not eager to wager large amounts of money will certainly like this one.
Today, it is not advisable to make very small transactions in the Bitcoin network because the cost of such a transfer may easily be higher than the amount you are sending. The Lightning Network would allow playing crypto casino games with tiny amounts of cryptocurrency thanks to very small commission fees. And if you have a direct channel with the casino, there would be no such fees at all.
Possible drawbacks of Lightning Network payments
Developers and scientists are actively looking for (and finding) some weaker aspects of the Lightning Network concept. It is mostly done to make the network more robust in the face of current and future challenges. But some of these aspects may make you wonder whether it is a good idea to use Lighting Network payments for bitcoin games and crypto casino gambling.
No big transactions?
In 2018, Diar.co have shared their research as to Lightning Network payments. They pointed out the percentages of successfully completed transactions according to the amount being sent. Allegedly, only transfers under $0.03 had 100% completion rate. If the amount had been set as $5 or higher, the chance of failure would have been about 50%, according to the analysis. If you had tried to send as many as $490, you would then have had about 1% probability of a successful transaction.
The information disappointed not only high rollers, but average bitcoin casino players, too. Later, the analysis was criticized for incorrect calculation methods which had supposedly brought fundamentally flawed results. The LN proponents also emphasized that the network had just been deployed and thus had a small number of nodes.
According to Decrypt, the average capacity of Lightning Network payment channels was $331 in September 2020. As we can see, it is getting better as the network grows. Bitcoin gambling buffs can already make decent deposits with the LN. The problem persists for high rollers, though.
In February 2020, a group of cybersecurity experts published interesting research. They came to the conclusion that Bitcoin Lightning Network becomes extremely centralized as it grows. This goes against one of the core principles of cryptocurrency ideology.
They stated that a small percentage of LN nodes would accumulate the larger part of bitcoins over time. There were 10% of the nodes that owned 80% of the cryptocurrency. Furthermore, the inequality in distribution was allegedly getting sharper over time, too.
Not that long ago, Israeli scientists discovered a way to steal bitcoins by overloading the blockchain. This vulnerability is based on the mechanism that ensures the correct sending of payments across several Lightning channels and certain time limits in smart contracts.
They informed the developers of the three main Lightning Network implementations about this discovery before making it public.
Humble choice of casinos
So far, the Lightning Network is not very popular in the crypto community. As there is not that much demand, crypto casinos are not eager to implement LN payments on their websites. Players that want to play casino games using Bitcoin Lightning Network have a relatively small choice of crypto gambling sites.