Blockchain has been around since 2008, and since then it has been used for many different things. It was introduced as the platform where Bitcoin peer-to-peer transactions are performed. However, with the release of smart contracts, it has taken on many more complex roles. People have been putting their trust in the blockchain concept because of a few key features.
- Decentralization. This has enabled the users of blockchain to take control of their own affairs, as this is a platform not managed and owned by one company. The power of this digital ledger belongs to the people using blockchain.
- Privacy. Transactions are private and you do not need to produce any personal information, as the authorization of the transaction is provided by a code and a link to the account.
- Accessibility. Anybody can become a miner of cryptocurrency, including making extra cash utilizing the job creation opportunities.
Benefits of Using Blockchain Technology in Gaming Business
Casinos have also taken the opportunity to engage in making use of blockchain for various transactions. Firstly, making payments for games and gambling online. This has resulted in quick and easy deposits/withdrawals and faster turnaround times. No need to rely on corporate companies and their servers, which are less stable.
It increases the customer base, as anybody with cryptocurrency is accepted. By incorporating crypto record system in gaming the ownership established in funs and betting rooms is uncompromised. Have a look at some of the comments of professionals in the industry.
The question asked to Ivan Montik, Softswiss was as follows: “What impact will blockchain have on the gambling industry? Is it for good or for bad?
Blockchain will and already does have a global impact on the gambling industry. It is a true game changer. All gambling regulators will transfer to blockchain in their gaming business licensing procedures, from fraud tracking and provably fair control to responsible gambling and finance management. It is definitely for good as it means 100% transparency of financial operations, clear taxation, healthy business environment and sustainable development of the industry as a whole.
Warranty of Funds Safety
There is one quick answer and it is, yes. Blockchain has certainly increased the safety and provided more privacy to all players. The main aspect of safety is your money does not belong to the casino or game owner; it is recorded on blockchain. No identification issues and the privacy of the user is protected. Blockchain will be responsible for making the bet according to the smart contract instructions. This builds trust and enhances the relationship between the two parties.
Legality of Gambling on Blockchain
Most of the regulations of online casinos in countries across the globe do not specifically include the new technology of cryptocurrency and blockchain gambling. This is still a grey area, therefore it can be said that anyone that has a cryptocoin account such as Bitcoin or Ethereum can use this account to gamble safely online.
Even in countries, which are largely restricted to virtual gaming, this method of play could be acceptable after regulation. Our experts do agree on this matter. Here is what Anastasiya Rimskaya, Business Development Manager at Endorphina had to say when was asked if decentralized gambling should be compliant with regulations:
Nowadays, there are almost no legal regulations for blockchain since it’s a relatively new addition. I believe that soon the official legal department will have to emerge with new regulations worldwide to regulate the operations of this new kind of gambling. With blockchain, the entire gambling industry will become completely transparent for everyone, including regulators.
Anonymity (No Documents Verification)
It’s not only about gambling. When you deal with cryptocurrency or any distributed ledger platform, in particular, all you need to have is an address to transfer money to. More to the point, it is created in the flick of the switch — “Generate a public address.” Note: The ‘public’ only stands for the fact that anyone knowing your address can remit funds to it. That is to say:
- It is not associated with your personal information, because…
- It is not linked to any bank account, thus…
- You are the only one to control your funds.
Regardless, of the IP you choose to enter a particular casino, there is no tracking system recording transactions. Meaning that you are not obliged to verify your financial stability. That’s where the element of anonymity intercepts with the fact that blockchain transactions, commonly, are free from taxation, because do not fit in the legal field of most countries, so far.
Of course, regulation is on the way. The thing is that, however, by the time regulation arrives, the market will already be occupied and successfully working. As of now, anonymity allows players to start receiving tax-free profit by only making three basic steps:
- Register on a certain gaming platform;
- Generate the address for receiving funds;
Blockchain Increases Responsible Gambling
When looking at blockchain betting rooms they confirm that all dealings are provably fair. This means that they have an open source algorithm powered by the crypto technology, which ensures that all random seed generation and random number generation, including hashing, are free from fraud.
This does improve the current RNG system, which can be tampered with and confirms that blockchain operators are more “fair” or “provably fair” in their games and way of dealing with bets and players’ money. The transparency of this data and availability to players makes casino clients trust the system more as they can ensure that everything is working according to the algorithms provided by blockchain. Softswiss confirms this when saying:
Blockchain definitely guarantees more fair gambling. By eliminating all possible fraud issues, it will allow casinos to concentrate on providing an incomparably better service to players making casinos games completely provably fair and bringing them to a whole new level: responsible gambling based on pure and transparent entertainment.”
Gaming Industries Built on Blockchain Technology
The versatility of blockchain technology lets developers build all kinds of games that run on a decentralized ledger – from lotteries and sports betting to online poker and slots. In fact, even land-based casinos opt to use digital record system for their slot machines.
Recently it has been confirmed that new blockchain machines will be released. They will be embedded with the same functionality as the old ones, but with some differences. It is considered that the financial volume on crypto casinos will increase to a huge $59 billion by the year 2020, making these changes cater for the high volumes and exceptional quality that are to be expected.
The new blockchain machines are already being produced and they will be situated in the major land-based venues worldwide. This will bring a lot more newcomers to these gaming houses and get them all enthusiastic about the new technology. They are also investigating lower transaction costs and developing machines, which will support more payment methods including cash and credit cards.
Although this might seem exciting, some experts have voiced that they will treat such developments with caution, where others like Softswiss are ready for the next level.
Using blockchain as a tracking system and creating a blockchain casino is one of our future plans. How soon it can actually be brought into life depends on the regulators’ policy and on how quickly they actually start using blockchain for tracking and control. From our side, we try to speed up the process by providing consulting services to the key players in gambling regulation and helping them understand the idea of blockchain and integrate the technology into their working processes.
The principal advantage of online staking houses built on digital ledger is that whatever games you play, they run in your browser and do not involve any servers or, all the more so, entity’s bank account storing users’ money. This makes the gamblers independent. Here’s what Jez San, the founder of FunFair, said about the freedom granted to bettors, who deal with blockchain-based casinos:
At the moment in the online gaming industry, players don’t always trust the online casinos. People have to make deposits with credit cards into the casino’s own account, so the players lose control of their funds. In our games, the players keep control of their funds at all time. They don’t make a deposit, they just play the games directly from their own cash wallet.
Aside from provably fair games that provide ultimate self-dependence for users, blockchain operators still have certain advantages towards the conventional ones. For example, the first Ethereum-based casino exploited the scene with an ambitious statement of having a 0% house edge (while usually, it’s 1%-5%).
Meaning that there is no guaranteed percent that house wins. The strategy is not stillborn. The success is achieved through accurate calculations that prove that amusements, which require SKILL and LUCK (not only luck, like in the case of roulette), will bring staking website the edge of approximately 0.83% in the long run.
Today there are increasingly more poker rooms built on top of blockchain technology. Needless to say about the improved usability and faster speed – it goes by default. In fact, there are at least two essential features, which are of much greater value. If you look at the list of popular poker websites, you will see that they not only plan to build a peer-to-peer interaction in the gameplay, but also introduce their own cryptocurrency. So again, what they furnish is two basic tools:
- User-to-user interaction. There are only users and the platform, by means of which they communicate. Considering the fact that trust is delivered through cryptographic algorithms, no one controls the process, except the game itself. Fairness is achieved at the stage of developing a smart contract.
- Token issuance. Players are going to need tokens because it’s an in-game cryptocurrency. While, investors can also make a good use of it, because in case the poker gets popular, the demand for its native cryptocoins will upsurge together with its price.
Blockchain is a transparent digital ledger, where any information can be transferred instantly. That’s why it can be successfully applied in sports betting, resulting in a more accurate predictive market. The distributed network can potentially solve a number of problems in sports betting. Here is the functionality the crypto technology-driven platforms are expected to offer to their users:
- Gather the required information from all over the web in one place;
- Conduct instant cashouts in cryptocurrency;
- Execute bets immediately;
- Provide the opportunity for users to build their own smart contracts that are programmed to automatically execute the bets when needed.
Speaking about lotteries, the benefit of applying blockchain is actually quite obvious. Until now, you could have never known whether the lottery results are fair or not, because the lottery is all about luck and nothing else. Today, there are plenty of crypto-based platforms like FireLotto, Kibo or Trueflip that will enable players to participate in a transparent, fair and indisputable, in terms of safety, game.
The original code is open-source, so anyone can check ‘the rules’ that determine the winner. On top of it, distributed network enables a lottery platform that has no country borders, but, at the same time, conducts instant payouts because they are done in cryptocurrency.