How Blockchain Is Making Gambling Possible
Over the past ten years, blockchain technology has gradually made its way into every major industry, from finance to shipping, real estate, and even art. It is gradually disrupting the inefficient processes that have existed in these industries for a long time. One of these: the gambling industry.
Since the expansion of gambling from brick-and-mortar casinos to huge internet platforms, the industry has encountered new problems. Many of these issues are related to security, but online casinos also lack the type of transparency that inspires trust from users. Since most transactions are hidden, players do not fully know how the casinos operate and cannot always be sure that a fair game has been played.
The use of blockchain technology in the gambling industry (cryptocurrency gambling) solves some of these issues because of its structure. Despite the possibility of player anonymity, every transaction can be traced. This does a lot for the financial as well as security aspects of online gambling and helps to build trust between players and casino operators.
Bitcoin casinos have been popping up everywhere, offering Bitcoin games such as slots, sports betting and even Bitcoin blackjack. Bitcoin casinos also created attractive welcome bonuses as well as no-deposit games to draw more players to their platforms. The integration of blockchain technology and gambling will most likely grow stronger as development continues to happen within the space. By continuously influencing the industry, blockchain technology is providing new solutions to online casinos.
How Blockchain is Influencing Modern Gambling
Blockchain technology creates value for online casinos through democratization, immutability, security, and inclusivity. It allows casinos to create their own tokens, which in turn allows users to become shareholders. This means that people can contribute to funding these casinos and benefit from their growth in the form of dividends.
An example is vSlice, a project on the Ethereum platform, which allows token holders to receive a percentage of its profits. Another example is the Nevula project by Chain Base casino. The presence of their tokens on cryptocurrency charts is building awareness of their platform.
Online casinos have a reputation for their lack of transparency. It is also believed that some platforms use tricks to ensure that players do not beat the house. This may scare potential users away, since nobody wants to lose their money, especially in an unfair way. Blockchain technology offers the type of transparency that players need. It stores all transactions on a shared ledger, and since these transactions can only be confirmed if they are valid, casinos will find it difficult to use their old tricks.
Anonymity is a huge issue when it comes to gambling. Players, especially those who win large amounts, can easily become targets for criminals, on the internet or off it. Unfortunately, many traditional casinos require players to offer a lot of information about themselves. This includes names, proof of nationality and identification documents. Mostly, these requirements are due to the regulations that most gambling platforms are subject to.
The verification process can be incredibly cumbersome, especially when players have to wait for confirmation emails. Some players may also be unable or unwilling to divulge such information, and as a result are excluded from playing.
Bitcoin casinos, as well as any other type of blockchain gambling platform, are not yet subject to the same regulations. As a result, players are allowed to remain anonymous. These casinos also gain some confidence from the fact that transactions on the blockchain can be traced easily, which leaves little room for foul play.
It should be noted that this anonymity feature can backfire. While blockchain has proven to be secure, it has its vulnerabilities just like any system. Player anonymity can put other players at risk, and it may put the casino at risk. In addition to this risk, anonymity doesn’t do much for the credibility of the casino, since cryptocurrency is already associated with illicit activity in many instances.
Blockchain is helping to curb fraud in the gambling industry. There are many vulnerabilities in traditional online gambling systems that make it easy for hackers to defraud players and casinos alike. For example, servers might be compromised, leading to data leaks that often contain money trails. One of the most publicised aspects of blockchain is its excellent security. Depending on whether it is a public or private blockchain, these systems typically have airtight consensus mechanisms in place to keep user data safe from any breaches that may lead to fraud.
Cryptocurrency presents a great use case for systems such as online gambling, in which users are typically restricted by location. For example, if players in Japan want to use an online casino in the US, chances are they would be expected to convert Japanese yen into US dollars. This means that they would have to endure the fees charged on those transactions as well as the lack of many suitable platforms for the conversion.
Cryptocurrency gambling allows players to make deposits and withdrawals in the form of various digital currencies. Players in Japan, for example, simply convert their fiat currency to crypto on an exchange. They then play casino games and store their earnings in crypto form for as long as they like, with few challenges. This puts every player on the same page irrespective of their country or even continent, as far as currency is concerned. Also, since banks are not involved in the transactions on these gambling sites, costs are significantly reduced.
Apart from the currency advantage, cryptocurrency gambling helps players to bypass their country restrictions on betting. In such countries, people are often forced to use the services of illegal betting clients, which does not always turn out well. On blockchain casinos, these players can play as many casino games as they want, with a stable internet connection and cryptocurrency wallet.
Blockchain and the Wisdom of Crowds
The so-called “Wisdom of Crowds” is a theory that when making predictions, the judgment of a crowd takes greater priority than that of a single individual. Since the 1900s, this theory has driven financial market predictions, which now include those centering around cryptocurrency.
The concept has gained popularity within the crypto ecosystem in the past few years and is now applied to betting predictions as well. Blockchain projects are giving users the opportunity to bet on different things, using concepts borrowed from the Wisdom of Crowds theory. Collectively, the outcome of these bets can be used to predict actual events in a trustless way.
Blockchain has been widely advertised as a potential solution to the pressing issues that many industries face daily. Its disruptive features such as security and transparency make it a perfect underlying technology for almost any platform in which data is either collected, stored, or transmitted. The gambling industry has many such platforms, since financial data is continuously processed during regular operations.
As a market worth more than $55 billion in 2019, online gambling is one of the most progressive industries. Unfortunately, gamblers in various countries are held back by regulations, insecurity leading to fraud, third party charges, slow transactions, location restrictions, and data theft. By using blockchain technology, gambling platforms and players alike can tackle these issues and benefit from a more efficient process. It’s exciting to see how this technology will positively impact the online gambling industry in five or even ten years.