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Researchers from the Department of Computer Science at the University of York presented the first-ever analysis of gaming transactions taking place in cryptocurrency casinos on the Ethereum blockchain.
In uncovering extreme behavior, the study could help identify the potential for financial damage through unsustainable spending among gamers, ultimately leading to better consumer protection tools.
The study unlocks blockchain transaction data to provide a detailed summary of spending behaviors, revealing how people are impacted by this new form of online gambling.
Decentralized gambling applications differ from traditional online casinos in that players use cryptocurrency as a stake. The codes that run casino games are also stored on public ledgers, known as blockchains, and cryptocurrency platforms such as Bitcoin and Ethereum use the technology to process payments and calculate game results.
When players place bets, their transactions are recorded on a blockchain anonymously. While this data has always been publicly available, the technologically advanced nature of the applications has presented obstacles to research and regulation.
As part of the study, the researchers developed an algorithm to extract and decode transaction data from the Ethereum blockchain. The work examined more than 2.2 million transactions from 24,000 unique addresses across three applications operating on the Ethereum cryptocurrency network (dice2.win, etheroll.com, and fck.com).
By focusing on simple casino-type gambling, such as dice rolls and coin flips, the researchers found that the average player of decentralized gaming applications spends less than at other online casinos in general, but that more engaged players spend substantially more.
As with regular online casino players, the researchers found that those who generally place larger bets are more likely to wager larger totals over the duration of their wagering career, however this appears to be amplified in the use of gaming applications. decentralized game.
The data revealed that the most engaged bettors wagered an average of 1,000 ETH (equivalent to about $ 100,000), which dwarfs the 1.1 ETH (~ $ 110 at the time of the study) average presented by most bettors.
In their assessments of typical “gamer” behavior, the researchers were also able to identify the presence of non-human gamers, known as bots, in the dataset. Bots can exist for a variety of reasons, such as to artificially increase the perceived popularity of the applications they are transacting with, or to attempt to win the jackpot from an application once it becomes statistically useful to pursue.
The researchers cite that although they cannot deduce the reason behind the robots’ existence, the identification technique they have developed represents an interesting area for future investigation.
Oliver J. Scholten, PhD Researcher at the EPSRC Doctoral Center for Intelligent Games and Game Intelligence, and a member of the research team, commented, “The study illustrates the power and breadth of transaction data that decentralized gaming applications can provide researchers “.
Scholten added: “These applications could really change the way people gamble online: we in the research community need to know how they operate, how to analyze them and, ultimately, how to identify who is in danger.”
Dr James Walker of Digital Creativity Labs commented, “The work draws attention to cryptocurrency transactions as a tool for large-scale in-vivo gambling research and presents a solid foundation upon which multiple avenues of further analysis “.
The article is published by The Public Library of Science ONE at https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0240693
