Cryptocurrency is coming to Vegas: Here’s what you need to know

Cryptocurrencies are headed to Vegas. On Thursday, Resorts World Las Vegas announced a partnership with Gemini, a cryptocurrency exchange and custodian. The goal of the partnership is to explore opportunities to integrate cryptocurrencies into the resort experience. While the new 3,500-room resort doesn't open until June 24, patrons will eventually be able to use their cryptos to pay for select services.

President of Resorts World Las Vegas Scott Sibella said, "Resorts World Las Vegas is committed to integrating innovative technology conveniences across the resort to enhance the overall guest journey."

But what does paying with crypto mean? Even with the meteoric rise of Bitcoin, the most prominent crypto, over the last decade, cryptocurrencies are still a foreign concept to many people. From a 30,000-foot view, it's not unlike using a debit card for online transactions. In that sense, you don't necessarily need to understand the underlying mechanics of cryptocurrency to use it — just as you wouldn't need to understand payment processing to use a debit card.

However, there are a few key things to know about cryptocurrencies, especially as they gain wider real-world functionality.

What is a cryptocurrency?

A cryptocurrency is a form of digital money. Unlike traditional fiat currencies (like the U.S. dollar), cryptocurrencies are decentralized. Simply put, this means cryptocurrencies are managed by global networks of users, instead of a single entity or central authority.

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Bitcoin is the original cryptocurrency, dating back to its debut in 2008. Since then, the idea of "digital currency" has gained a lot of traction — the cryptocurrency market is now worth over $2 trillion. While Bitcoin remains the most popular and commonly traded cryptocurrency, companies and developers have launched thousands of additional cryptocurrencies with a wide range of purposes, from smart contracts to rentable storage space.

While various industries are still figuring out ways to practically use cryptocurrencies, many people and institutions treat them as investments, buying and selling coins with the hope that their values will appreciate. Crypto exchanges were founded to facilitate this process. These exchanges — such as Gemini and Coinbase — are similar to stock market exchanges like the New York Stock Exchange and the Nasdaq.

That said, before you purchase cryptos for use or as investments, it's important to understand how they work.

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How do cryptocurrencies work?

Most cryptocurrencies rely on blockchain technology to function. A blockchain operates as a public ledger. As people trade a cryptocurrency, each transaction is verified by the network, recorded on the ledger, and protected through cryptography techniques like encryption — hence the prefix "crypto."

Transactions are grouped into batches called "blocks." To add blocks to the blockchain, specific users (known as "miners") solve cryptographic puzzles using dedicated software and hardware. The first miner to solve the puzzle is rewarded with new coins and usually a transaction fee. This is the process many cryptocurrencies use to issue new coins.

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In order to actually possess cryptocurrencies, you need a cryptocurrency "wallet." There are several types of wallets, but the two most common are hosted wallets and unhosted wallets. These are also known as custodial wallets and non-custodial wallets.

If you have a hosted wallet, a third-party financial institution holds and secures your crypto account for you — much like a bank that stores your money in a checking or saving account. Conversely, unhosted wallets remove the third party from the equation. You maintain complete control over your account and its security, which means you're also responsible for remembering and protecting your account password (often referred to as a private key). This is equivalent to holding cash in a safe at home.

Wallets enable people to purchase, trade, and use crypto for goods/services — such as gaming-related services at Resorts World Las Vegas.

How will cryptocurrencies work within casinos?

The new partnership between Resorts World Las Vegas and Gemini is a big step for the crypto industry. While both entities highlighted the significance of the partnership, the details about how cryptocurrencies will work within the resort — beyond that there will be "crypto-friendly services" — will be "finalized and announced in the coming weeks," according to PR Newswire.

Tyler Winklevoss, CEO of Gemini, said, "Whether it's the ability for their customers to use cryptocurrency at Resorts World Las Vegas or convert dollars into crypto, being one of the first to support crypto is a great way to meet the needs of the next generation of customers and provide a 21st-century experience."

Previous crypto developments in Las Vegas are more insightful.

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Earlier this year, International Game Technology Plc — a slot machine producer — received a patent that sheds light on how cryptocurrencies could work within casinos. The patent is for a system that enables players to transfer funds from a cryptocurrency wallet to a gaming account, which could then be used for casino games like Megabucks and Wheel of Fortune.

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Businesses across many industries face the decision of becoming early adopters of cryptocurrency or shying away from the risks. But it's clear that the landscape is changing, as evidenced by the casino industry's willingness to incorporate this technology into its gaming experience.

Photo courtesy of Resorts World Las Vegas