Blockchain is disrupting the gambling industry with all sorts of useful applications that go way beyond obvious stuff like betting with Bitcoin.
Blockchain is a ground-breaking technology that is currently associated with cryptocurrencies. But it’s not only a platform for tokens – it’s far more. Simply put, blockchain is the system that allows safe recording and transferring of data without middlemen. It’s tamperproof, transparent, and irreversible. That’s why blockchain can be successfully applied in almost all spheres of our life, from obvious sectors like finance to the entertainment industry.
The entertainment industry also includes the gambling industry – where finance and entertainment collide, in a sense – and it’s within this particular industry where blockchain has proved to be especially disruptive.
Indeed, gambling and blockchain probably have the most potential for successful cooperation when it comes to safety and transparency of records. There are obvious threats to players in regular online casinos: fraud, identity disclosure, and payment data vulnerability. Blockchain is one of the only viable solutions that can make gambling more secure, fair, and convenient.
Cons of online casinos
Before looking into blockchain solutions for online casinos, it’s worth considering the issues that the industry faces today:
- Lack of reliability. Gambling is a business, and online gambling is a multibillion-dollar business. Nobody can be sure that websites follow “fair play” rules, especially, when it comes to house edges.
- Strict regulation. Many countries keep a tight grip on gambling in terms of regulation – to include banning it in many cases.
- Complex transaction procedure. Depositing and withdrawing require verification and may take up to several days. Also, some banks might reject payments related to online gambling.
- Fraudulent activity. Online casinos can also be subject to financial fraud initiated by their visitors and thus bear the losses.
The most obvious advantage of blockchain is that it introduces cryptocurrencies as a payment method. Using cryptocurrency, players can remain anonymous and benefit from instant financial transactions. Casinos gain access to more efficient deals with lower fees and without cash tracking.
But if we go deeper into blockchain, we see that the technology has a lot more to offer to both parties:
- Transparency. As the blockchain network records all transactions and ensures their immutability, players can be sure about the fairness of casinos and vice versa.
- No third parties. What’s even more important, blockchain eliminates any middlemen like banks or financial institutions from the transaction process. Users and websites interact in a peer-to-peer mode.
- Enhanced security. Blockchain stores no personal data about the transaction parties. On top of that, the most innovative services allow players to use smart contracts with predefined terms and conditions which can’t be changed after the initial signing. Thus, there is no room for manipulation and fraud.
- Accessibility. Decentralized systems will allow more gamblers to join the game, as there is no single entity in control of blockchain. Theoretically, users can play even if they’re physically located in countries where online casinos are banned.
A lot of casino websites are switching to blockchain gambling now and starting to support cryptocurrencies as an acceptable payment method. Here are some of the more interesting examples:
Poker rooms. Apart from traditional video poker, there are several poker rooms powered by blockchain and smart contracts. They allow users to join the game from anywhere in the world, and use cryptocurrency deposits and withdrawals for faster and smoother transactions. Also, decentralized poker rooms remove intermediaries, and thus ensure the fairness and safety of the game.
Betting websites. With blockchain technology, betting websites are able to gather worldwide data on sports and media events. Using smart contracts, bookmakers provide self-executing bets. Even more, users can back their own predictions with different conditions and incorporate them into a smart contract.
Lotteries. Probably the least fair form of gambling is lotteries. Lotteries are tricky because participants can’t discover real results. However, blockchain lotteries are fully transparent because anybody can check the rules.
Even brick-and-mortar casinos are implementing blockchain solutions. Special blockchain-powered slot machines have already been placed in some gambling houses. Blockchain slot machines have the same functionality as regular ones but additionally accept cryptocurrencies and track transactions via blockchain.
Entertainment: more use cases
Gambling industry is far from the only sector of the overall entertainment industry to find use cases for blockchain. Over the past few years, the industry has seen many other sector-specific blockchain solutions emerge.
- Media distribution. Blockchain allows media content creators to release their products and distribute them among customers without intermediaries. Example: Imogen Heap released a song via blockchain network Ujo to control distribution and protect digital rights with smart contracts.
- Ticket booking. Popular public events like football matches or music fests attract scalpers and fraudsters who sell fake tickets to customers. With blockchain data, both sellers and buyers can prove the ownership of a certain ticket. Examples: There are many startups that aim to decentralize ticket selling, such as BitTicket, Aventus and Evopass.
- Advertising. Digital advertising is full of middlemen and bots that manipulate the performance of ads. Blockchain stores info about the number of views and the nature of these views, so bots and fraudsters can be spotted easily. Example: MetaX tracks and stores real-time responses to specific ads, so ad creators can evaluate efficiency easily.
- Digital rights. Content makers lose a lot of money because of piracy and counterfeiting. Blockchain records all copyright information and ensures it integrity. Example: Spotify has invested in a blockchain startup to create a global media library on the decentralized basis.
Written by Julia Beyers, a freelance journalist who covers trends and prospects for the global game industry, as well as blockchain, cryptocurrency trends and the impact of Bitcoin on various other industries