Cryptocurrencies built on top of the blockchain technology are on the verge of revolutionizing traditional financial and data logging systems. They have the potential to make the current systems more efficient, accessible and faster. A system without an intermediary executing your transactions, instead you have smart contracts or computer code that automates the process.
A report by Statista states that online gambling and betting sites are also a part of the global financial system and are expected to reach a market size of more than $550 billion USD by 2022. It’s no secret that most casinos have the odds stacked against a player but with blockchain technology, there is the element of transparency that can ensure a fair game.
Blockchain is a system for keeping information integrated across numerous independent stakeholders without relying on central authorities. It allows individuals and groups of organizations, both related and unrelated, to share and reconcile information through an agreed-upon single collection of data. It’s beneficial for tracking financial assets.
Online casinos are virtual establishments that allow users to place bets over the internet. These casinos can be accessed from the comfort of home or through any mobile device. This helps the users to quickly make deposits and start playing their favorite games. As these are real money gambling sites, certain rules and regulations also apply to them. These rules and regulations are there to protect the users from frauds and scams.
Blockchain integration with online casinos is usually divided into betting and gambling. There is a difference between the principles of operation of betting and gambling. In a classic casino, the user plays against the casino whereas in the case of betting, the users are playing against each other.
What is a Crypto Casino?
Crypto casino works quite simply; all information about user transactions is fixed in a smart contract that serves as the basis for the information about the percentage of payments received or payed to the users. The same technology is also used to rate and rank the popularity of the games.
Game results and payouts with blockchain integration makes viewing all transactions absolutely accessible and transparent. Taking the example of this blockchain based bitcoin casino, the actions of players and casino are displayed in an unchangeable public registry. Using smart contracts, the payments are made automatically and casino administration cannot prevent this.
How a Casino Smart Contract Works?
When a user of a blockchain casino places the bet, a sequence of pseudo-random numbers is generated that sets the outcome of the upcoming game. This sequence is then entered into a temporary storage where the program generates a hash of the entire sequence and writes it to the blockchain. When the game begins the algorithm retrieves the results from the repository and enters the game. The player can see how the ball got into a certain cell of the roulette or certain cards were dealt. At the end of the game, the player can double check all the pre-generated results and understand the legitimacy of the game.
Blockchain is a new technology and it still requires a lot of work to make it more useful in different public interests. The very first and most common challenge is scalability. Because of the inherent immutable public ledger of transactions that makes it transparent, it has to rely on validators to confirm the ledger entries and that consumes a lot of time.
Storing and synchronizing the transaction database on each computer on the network is also a similar kind of challenge. The base volume of transactions can increase daily requiring additional data storage capacity and consuming a large amount of electricity.
Over the past several years, the casino industry has experienced rapid growth and remarkable developments with new products, new marketing techniques, new approaches to payment, and innovation generally. Similarly, in the FinTech space, the cryptocurrency markets have increased dramatically in terms of adoption by customers, acceptance by financial institutions and other businesses, and overall market impact, footprint, and significance. Cryptocurrencies also facilitate more efficient payments and appeal to younger, more tech savvy customers.
Most of the online casinos that use bitcoin and other cryptocurrencies as a form of payment, do this to bring in that younger and tech savvy users. Payments through cryptocurrencies are also being used to maintain anonymity. Traditional casinos require a large amount of personal data whereas crypto transactions use much smaller amount of such information.
Crypto networks are decentralized and operate on equal footing. As casino players pay more and more attention to confidentiality and anonymity, the use of cryptocurrencies for payments is being gaining adoption to increase the attractiveness of the gambling platforms for such users.
