Blockchain technology is slowly gaining recognition across industries. It may seem that its adoption is slow and this is because most industries are scared of getting displaced. However, blockchain and cryptocurrency technology is not displacing old systems but making them better. Jesús Cedeño explains
The distributed ledger technology that forms the basis of blockchain, is an internet-based immutable ledger that keeps data and records safe and secure. Now imagine combining this technology with a centuries-old industry like the gambling industry-epic right? With the introduction of online casinos in 1996, the online casino industry has grown and is now worth over $50 billion.
The age-long tradition of gambling has been quite a debate with one side arguing for the benefit of the industry to the economy. Well, the other side argues against the industry with claims of it being high risk and highly addictive.
However, the industry is constantly evolving and also highly competitive in nature. This makes it possible for innovative and continuous improvements on products to keep all of them in business. Online casinos and bookies make use of different technologies to keep their customers entertained. It is no wonder that blockchain technology has been embraced in the industry.
Blockchain-based verses regular online casinos
Blockchain-based casinos are similar to your average online casinos. The major difference between them is that the casino is built on the blockchain. There is also the option of an additional payment method; the use of cryptocurrency for deposits and withdrawals for blockchain casinos. Regular online Casinos also have to follow a strict regulatory framework. This is because a lot of scepticism still exists in the industry. To operate an online casino, a license is obligatory. Online casinos without a license are considered scam casinos. However, it is worthy to note that most casinos accept cryptocurrency as a medium of payments but are not built on the blockchain. This is because banking institutions are usually strict on gambling actions and it may be difficult to make payments.
A lot of online casinos started implementing the blockchain technology by using smart contracts to lock in bets during games or for processing payments. More companies are beginning to apply the blockchain into online casinos. For instance, Augur utilises the Ethereum blockchain and users can make market predictions on the platform. Also, a company like TruePlay has built a reputation for being transparent with its gaming. Another platform, FunFair has the options of players utilizing its tokens in playing games on the platform.
The benefits of blockchain technology for online casinos
When talking about online casinos, we may need to understand why the blockchain technology is great for the industry. First, there is a lot of distrust in the industry with regards to how transparent their practices are. However, the blockchain is a transparent and immutable ledger and users are confident in transactions that occur. There are also a lot of shady practices when it comes to pay outs. Although the gaming machines are programmed to pay back between 80% and 99.9% to participating players, yet most online casinos do not comply with these rules. So, how has the blockchain transformed online casinos?
1. Enables a system of trust
There is a long history of distrust between casino players and owners. This is because the industry is perceived as unfair when it comes to payouts. Lucky players are a risk that online casinos have to bear. And it is no secret that casinos earn money when players lose, making a lot of people believe that the system is rigged to favour the casinos. With most casinos finding it hard to part with money even if players win fair and square. In most cases, they will have to wait for days, weeks or months before making payouts or blocking such players from the website. Even after implementing the blockchain into online casinos, there is no guarantee that this will change the unfair. However, the blockchain can serve as a record keeper to games and bets and ensure that the odds are not rigged and payouts are fair and on time. Therefore, the blockchain serves as a solution for the underlying trust issues in the gambling industry.
Users are protected from the questionable practices of the gambling industry such as lack of randomness. Every dice roll or bet can be checked on the blockchain. Also, user details are kept secure and cannot be randomly stolen nor can the public view their transactions with their identities. Users are only tied to the wallet addresses and secured with cryptographic measures.
3. User anonymity
Most gamblers like to keep their identities hidden and the blockchain gives them the needed anonymity. To be a player in a blockchain-enabled online casino, all you need is a wallet with which you deposit while playing and withdraw if you win. Some online casinos allow crypto payments even if they are not blockchain integrated. By using cryptocurrency, your bank details do not bear the fact that you participated in an online casino, keeping anonymous. By using the bank, the gambler’s personal details are revealed and cryptocurrency protects him from this.
4. Ease in carrying out transactions
When it comes to carrying out transactions, banks have been known to take longer time in processing transactions. Also, bank charges can be on the high side sometimes. With the use of cryptocurrencies, players do not have to wait for the long processing times that the banks take to initiate the payments. Excess charges are also eliminated with the use of the blockchain.
5. Eliminates cross border discrimination
The integration of the blockchain into online casinos means that it becomes a global sport. Players from across the world can participate in a bet and place their odds using cryptocurrency.There is no need to visit a gaming club or casino and there are no limitations when it comes to making payments. This is because cryptocurrencies are not affected by cross border monetary restrictions.
Blockchain technology and other emerging technologies hold a lot of promise for the gambling industry. Online casinos still have to come face to face with concerns such as the prevention of money laundering, gambling addiction and users from countries where gambling is illegal. They are also faced with the issue of regulation in individual countries, taxation and complying with local and international laws. These issues are because most online casinos are centralized. By becoming decentralized, most of the aforementioned issues can be eliminated.
However, the online casino industry can still adopt the blockchain while complying with laws and regulations. Instead, the distributed ledger technology will be used to ensure that gambling is safe, secured and fair to players. It will also offer lower costs and transparency to users eliminating years of questionable practices.
Jesús Cedeño is a doctor turned cryptocurrency and blockchain enthusiast who loves sharing his thoughts on cryptocoinsociety.com to help simplify crypto in order to make it more accessible to the masses.