Online casinos powered by crypto-technologies may be able to answer security fears and doubts about rigged games by using transparent Blockchain-based solutions.
It’s inadvisable (and a little trite) to hail particular technologies as “the future,” however tempting it may be. But with cryptocurrency now a global market worth around $30 billion in the gambling industry alone, and an annual growth rate of 10 percent, it’s probably safe to say that cryptocurrency gambling is certainly “the present.” The numbers certainly seem to say so. In 2016 alone, amounts wagered at cryptocurrency casinos were in excess of 1.5 million Bitcoin (BTC).
The evolution of gambling
The practice of gambling is almost as old as time itself, appearing to have sprung up in every ancient culture. The Native Americans, the ancient Egyptians, Chinese, and Europeans all gambled for thousands of years before mingling with each other. But as with every other aspect of human existence, gambling has evolved and refined itself, latching on to technological advances.
Online gambling began in 1994 when Antigua and Barbuda legalised gambling on the internet. By 1996, there were at least ten websites offering online roulette or poker. With the introduction of Bitcoin in 2010, it was inevitable that gambling would find a use for cryptocurrency. Sure enough, 2013 saw the first purchase of an an entire online casino by an anonymous customer at the price of 126,315 BTC.
Enter: the cryptos
For many years, the internet’s inherent lack of security has placed online casinos at a disadvantage when compared to their traditional siblings. For this reason, all online casinos, lotteries, and games of chance powered by crypto-technologies seek to adopt the transparency and accountability of Blockchain-based solutions to assure players the fairness of their games and the absence of any tampering or interference – and therefore obtain a competitive edge over their centralized rivals.
Among the first online gaming projects to be based on Blockchain was vDice, a game of virtual dice based on the Ethereum Blockchain cryptocurrency architecture. vDice is worthy of discussion as it has no servers, accounts or deposits. Rather, the entire game takes place on the Blockchain, therefore making it impossible to be manipulated or controlled by anyone, including the developers. In essence, vDice is the first decentralized gambling app in operation and its developers go to great lengths to prove just how open and fair it is. vDice’s development team even commissioned an independent audit of the project’s source code and then published the results of that audit online. This openness has been well received by the public, and in a crowdsale in late 2016, the vDice team raised around $1.7 million.
Another Blockchain success story is Edgeless Casino, a notable gambling project that uses crypto-technologies to prove that it does not interfere with the games it offers. Launched shortly after vDice, Edgeless offered a slot machine game built around the Ethereum Blockchain. Its founders claim this makes Edgeless “the first completely transparent online casino.” Edgeless has plans to add other games of skill, which include poker and blackjack, as well as branching out into mobile gaming and sports betting. The project is attracting investor attention, raising over $2.5 million over the course of an ICO earlier in 2017.
A newcomer to the scene, TrueFlip is a lottery that uses Blockchain technology to ensure complete fairness and transparency. The TrueFlip game model is similar to the classic Powerball lottery – having bought as many tickets as they like, players then have to correctly guess the numbers drawn by a provably fair algorithm. Guessing all the numbers correctly wins a Jackpot. The game uses tokens which are essentially smart contracts using Ethereum Blockchain to ensure easy transfer of funds and tradability at online exchanges.
Making project funding painless
Finance for these projects tends to come from Blockchain crowdfunding, particularly crowd sales, or contribution campaigns which are known as ICO (Initial Coin Offerings). ICOs shot to popularity a few years ago after an ICO which led to Ethereum became the most successful crowdfunding campaign in history.
It is no coincidence that online gambling platforms prefer crowdfunding over more traditional capital solutions like venture investments. The reason for this is quite simple – people who have a stake in the project will want to help make it succeed. Crowdfunding campaigns build a community around the project, incentivizing players to participate and rewarding the most proactive ones.
With projects like TrueFlip, there are even more incentives. Participants, who are also shareholders, are offered the chance to play, thereby adding dividends to whatever their winnings are.
Blockchain: the future of gambling
Despite its evergreen popularity, the gambling industry has always been the subject of mistrust. This is basically down to human nature. Gamblers have good days and bad days. The instinctive reaction of most people to an unlucky run at the casino or lottery is one of suspicion. But now there is the hope that the transparency of Blockchain technology can break the cycle of mistrust surrounding gambling, and breathe new life into this ancient game.