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Blockchain, also known as distributed ledger technology, is mainly known for being the foundation of cryptocurrencies like bitcoins, but is already transforming many industries as developers find fancy uses for this. Could it be 2019 the year when the blockchain revolutionizes the gambling space?
It certainly appears that way, since gambling companies are already testing the applications of the technology.
What is the blockchain?
Blockchain works by providing a decentralized network of participants who must agree on a transaction before data transfer occurs. With bitcoin, this means that if a person transfers 100 bitcoins to another person, the distributed ledger records the transaction centrally and can never be changed. It removes the lack of trust between the parties, who with blockchain do not need to offer receipts that could then be lost and make it difficult to prove that a transaction took place.
As a digital transaction system that enables secure data storage and intelligent contract execution in peer-to-peer networks, blockchain can completely eliminate third parties in transactions. Instead, peer-to-peer is performed in more or less real time, because the blockchain guarantees integrity and security.
Because of the way the blockchain is evolving, the financial and payment sector has enjoyed greater attention and investment. Now ten years, it is not difficult to understand why the gaming industry is trying to block the next phase of its evolution.
Gambling with bitcoins
Most people currently play online by linking their credit card or PayPal details to their account, but an increasing number of players bet with bitcoins, ethereum or other cryptocurrencies. For an online casino, the use of blockchain-based virtual currencies reduces the transaction costs of a bet.
The transparency of the distributed ledger also makes it more difficult for an unscrupulous gambling operator to try to defraud a client by refusing to pay out a wager because he claims that the customer has broken his rules or applying hidden charges.
For gamblers who want to play anonymously, Blockchain protects the shots from prying eyes because they are not displayed on a regular account statement. In countries where online gambling is illegal, anonymity means that only players can access their businesses, not governments. The downside is that anonymous bets can make it harder for families to find that a loved one has become a problem gambler.
Blockchain's retention of transaction data also makes it easier for gamers to predict better forecasts. A large sharing of historical data from a wide variety of sources among groups of players, for example in online forums, means that players can better calculate the odds of a win.
However, the volatility of cryptocurrencies means that a potential big payout could be greatly reduced when a player is ready to cash in the real currency. This volatility, however, is what attracts some bettors to bet on the fiat values of cryptocurrencies.
Smart casinos
In December 2018, EOSBet – a gaming platform based on the EOS cryptocurrency – acquired an official license from Curaçao to manage the world's first casino with online blockchain. EOSBet offers baccarat and other games and has a value volume of about $ 5 million (£ 3.9 million) in EOS-based betting tokens. He paid about £ 1 million (£ 0.88 million) to the winners in his first two months of beta mode.
Also in December, Quanta, a blockchain-based lottery operator, signed a contract with Nigerian International Lottery and Gaming Ltd which will help transform the official lottery of Nigeria. The lottery is worth around $ 1bn (£ 780m) in bets every month.
Quanta, which has been operating since 2015 and has been authorized by the Isle of Man regulator in 2017, says that blockchain will improve equity and transparency in the gaming industry in Nigeria. Reportedly, lottery corruption is spread across the African continent, players will surely appreciate the arrival of blockchain technology.
DappRadar is a platform that keeps track of blockchain apps by value, cryptocurrency and revenue, among other things. On the Ethereum blockchain network, which runs on its own Ether cryptocurrency, gambling apps outperform all other apps.
Between July and August 2018, players traded about $ 40 million (£ 31.3 million) on the Fomo3D app on Ethereum, where players use a fictitious currency and try to take it away from one 39; other.
Fomo3D attracts more players every day than non-blockchain online sites like Poker Stars. However, it has been described as a Ponzi scheme. And because most of the gambling blockchain apps are not licensed or regulated, players are taking a risk with their investments, even if the technology guarantees maximum transparency.
Regulatory problems
Some blockchain apps are linked to criminal activities, such as DragonCoin's cryptocurrency connected to a Macau gangster network, so there is clearly a need for regulation. But how?
The cryptocurrencies that want to issue a first coin offer (ICO), similar to when regular companies exchange shares for the first time, create a headache for market regulators, who have to verify a large amount of data before approving .
Regulators are also able to prosecute gambling blockchain gambling operators who behave illegally only if they can be sure of getting a result, due to the cost of conducting an investigation.
Then there are problems like checking the players' age so that minors can not play under the radar. So far, apparently no instances of gambling blockchain platforms have been registered that offer self-exclusion for problem gamblers.
The transparency of the blockchain means that further expansion into the gaming space is inevitable and can not be ignored, but regulators will have to find ways to address all these problems.
