Meet the cryptos: The family that Bitcoin brought to the gaming table

Bitcoin was the first cryptocurrency and to this day remains the most popular by market capitalisation. Designed by the anonymous Satoshi Nakamoto, Bitcoin was digital cash that could be exchanged between users via a decentralised platform (the blockchain), with the decentralised platform being monitored and upheld by machines across the world.

The Bitcoin whitepaper was launched in late 2008, with the Bitcoin network going live a few months later. There are a finite number of Bitcoins available for use and trade, which can be generated through the act of mining.

This involves using a machine to validate Bitcoin transactions going onto the blockchain, which yields a small crypto reward in return.This validation system is known as proof-of-work (PoW). In this, any machine can participate in the validation process, with the machine that can prove its work in validating the transaction first gaining the mining reward.

Bitcoin’s value has grown tremendously. In 2010, 10,000 BTC was worth roughly $40 (the amount paid in the now infamous ‘Bitcoin Pizza’ event from May of that year), yet as of writing, the value of 1 BTC is roughly $65,500 – making that pizza order worth $665m today.

In a gambling sense, the first use of cryptocurrency in games of chance was likely practiced among Bitcoin’s early adopters, testing the capabilities of blockchain technology and the various use-cases of crypto to drive its value.

Ethereum (ETH)

Conceived in 2013 by programmer Vitalik Buterin and going live in 2015, Ethereum was seen by many as the ‘next generation’ of crypto following on from Bitcoin.The Ethereum Network introduced the market to smart contracts. Without getting too technical, a smart contract is a set of code transferred alongside  a crypto transaction that holds a set of instructions to be deployed once conditions are met. Much like a crypto transaction, smart contracts cannot be updated.

An example of how smart contracts are used can be seen with NFTs, which spiked in popularity in the early 2020s. For example, if someone was selling an NFT for 1 ETH (roughly $3,420 as of writing) and someone sent the seller the required Ethereum, then they would receive the NFT in return. These transactions are then recorded on the blockchain, leaving a permanent trail of ownership of that NFT.

Ethereum also allows users to deploy decentralised applications (dAPPs) on the Ethereum blockchain, giving them a method to build their own crypto projects directly on the Ethereum Network. Several popular cryptocurrencies have been designed using this method, such as the ERC20 meme coin Shiba Inu, launched in 2020. Designed as a direct competitor to Dogecoin (see below), this coin was able to utlise Ethereum’s advanced technological capabilities and create its own metaverse game, NFT collection and extended coin ecosystem.

The Ethereum used today is not the Ethereum that once was. In 2016 a project called The DAO (Decentralised Autonomous Organisation) was instantiated on the Ethereum blockchain. However, due to using open-source code, The DAO was hacked, with $3.6m of the $11.5m raised for the project being stolen. To stop the leak in funds, the Ethereum community made a hard-fork in the Ethereum blockchain, essentially splitting off into its own branch away from the leak.

This new branch is what is called Ethereum today, while the version of the blockchain affected by the hack is known as Ethereum Classic. Each version utilises its own cryptocurrency. The Ethereum Network also saw a major revamp in September 2022, when it executed The Merge.

The Merge saw the entire network – including projects on the chain like Shiba Inu – switch its validation system from a PoW system to a proof-of-stake (PoS) system. This system selects machines to validate blockchain transactions based on the number of coins held on the system, greatly reducing the number of machines involved in the validation process and thus the amount of power used.Ethereum cut its energy use by over 99% as a result of The Merge.

Dogecoin (DOGE)

Dogecoin was launched in 2013 by Australian software engineers Billy Markus and Jackson Palmer as a direct response to trends of the time, when crypto was growing in notoriety and becoming ‘too serious’ in the eyes of some. Dogecoin is often pinned as the first meme coin, a popular genre of cryptocurrency that uses current social media trends as the basis for their design. These coins are designed with less focus on utility (eg, Ethereum) and more focus on creating communities, driving the value of the coins with their routine trade and social media discussion.

Dogecoin is based on the popular Doge meme of the early 2010s, and in its earlier years was used by the Dogecoin community to aid in various charitable causes and as a way to ‘tip’ various users, due to the minimal value of each coin (14m DOGE was worth roughly $11,000 in 2014).

Dogecoin’s value exploded in 2021 thanks in no small part to the social media attention it received from billionaire Elon Musk. On 6 January 2021, 1 DOGE was worth roughly $0.01, but by 7 May DOGE was worth $0.58. This surge saw the emergence of many other meme coins on the market, trying to capitalise on Dogecoin’s explosion in value. As of writing the value of Dogecoin has somewhat settled, currently sitting at around $0.13.

Tether (USDT)

Launched in 2014 by Brock Pierce, Reeve Collins and Craig Sellars, Tether is a stablecoin; a cryptocurrency with a value pinned to a fiat currency, such as the US dollar.Stablecoins are able to utilise the benefits of blockchain technology (anonymity, global payments without bank interference, etc) while remaining at the same value, allowing them to avoid the sharp fluctuations often reported by other cryptocurrencies.

Due to this, Tether is among the most popular cryptocurrencies to gamble with, as players remain aware of the value of their bets against a fiat value. Tether is also designed specifically for individuals, businesses and exchanges, which makes it particularly straightforward for online casinos to integrate.As of writing, Tether has the highest 24-hour trading volume of any cryptocurrency, even outperforming Bitcoin and Ethereum.

Solana (SOL)

Touted as the ‘green crypto’ by some, Solana was launched in 2020 by Solana Labs, which was founded by Anatoly Yakovenko and Raj Gokal in 2018. Solana utilises a unique proof-of-stake model that keeps energy use low and the speed of transactions quick. At present, one Solana transaction uses roughly 0.7kJ of energy, while one post-Merge Ethereum transaction uses 144kJ of energy.

Solana also utilises many of the technological innovations brought about by Ethereum, such as dAPPs, smart contracts and a network that can be built upon by other users, with examples including the OKX exchange. However, it is not as popular as Ethereum.

Solana was notably impacted by the collapse of FTX in 2022 – a cryptocurrency exchange that was found to have an $8bn hole in its accounts – due to FTX’s investment in the blockchain. However, after the collapse saw Solana’s market cap drop from $55bn to $3bn in a year, Solana has since recovered, how holding a market cap of $63bn.

Despite being the fifth-largest cryptocurrency by market capitalisation as of writing, according to research conducted by Softswiss (see our previous article), this has not yet reflected in the gaming market. This may be due to the higher value of the coin (1 SOL is worth roughly $137 at of 18 June 2024) or the increased value of the coin over the past year (1 SOL was worth roughly $16 on 20 June 2023).