Gambling has always been a polarizing topic, and online gambling has only made opinions flare even stronger on both sides of the fence. One side fears that websites are not being entirely honest and may be cheating customers, while the other side believes that the convenience of online gambling may cause those who are borderline addicts to tip into a downward spiral of debt. The beauty of this situations is that both sides (and many more) will find comfort in the techniques being implemented in the online gambling world thanks to blockchain technology. Through the utilization of decentralized, blockchain-based technology, the gambling industry will be able to transform into a fair, transparent, and safe environment for all.
The Major Current Problems with Gambling
From fancy casinos to spending a night with friends playing cards, online slot machines, and everything between, gambling finds its way into our lives. Humans have been gambling for thousands of years and they show no signs of stopping anytime soon. Yet even with this clear interest in gambling, there are still many people who find the entire practice despicable. This new crypto technology can’t change overall opinions on gambling, but it can help to clear up some of the current problems that exist surrounding the specific practices used in today’s establishments.
Gambling has a bad reputation, and you’ll often hear people say “the house always wins.” This statement is referring to two different ideas: the first being that the house always has the best odds of winning, and second, that anyone who gambles risks far more than the establishment they bet against. In traditional brick and mortar casinos, the house tries to do everything it can to increase their profits, and in an online gambling setting, websites can be even less trustworthy.
Luckchemy, a decentralized gambling platform, can help build the overall reputation of online gambling as well as strengthen the reputation of existing companies through its transparent practices. If conditions are easy to understand and each moment of the process is fixed and verifiable, then reputation is no longer based on personal opinion but is instead backed by data. By recording everything on a blockchain, all outcomes from lotteries, slots, etc., will be completely verifiable, ensuring that the house isn’t able to use any unfair advantages over players. Luckchemy will host their own games as well as provide a blockchain platform for other websites to host their games in a decentralized manner.
Rewards (or lack thereof)
Given that the entire purpose of a casino is to make money, they do everything they can to keep people gambling and to stack the odds in favor of the house. Along these lines, they are only interested in sharing enough rewards and winnings that it keeps customers coming back while retaining their edge to make a profit over time. The same can be seen in lotteries and scratch-off tickets — the winner never wins the full pot since a large percentage (around 40%) is set aside for the establishment hosting the lottery.
LetBet, on the other hand, takes no percentage from transactions or winnings. They host their own decentralized network and charge a micro fee (<1%) to pay their nodes for the hosting data. Luckchemy, much like LetBet, pays out nearly 100% of jackpot winnings to the winner.
Make no mistake, online gambling makes gambling easier and more accessible for everyone, including those who have problems with gambling. Because traditional casinos are designed to earn as much profit as possible, many prefer to encourage gambling instead of providing the resources to help addicts. There are some options that can be found on current online gambling websites which allow users to limit their own play, but if they don’t realize they have a problem how can they help themselves?
When it comes to being responsible about gambling addiction, Edgeless (a decentralized, transparent casino) is working hard to help their users who have problems. Operating an online casino on the blockchain that is fueled by small blockchain transaction fees allows Edgeless to operate with compassion for their players since their bottom line isn’t based on people losing when gambling. Of course, if players do lose then Edgeless makes a profit — but in order to ensure those losses don’t get out of hand Edgeless is considering specific protocols to automatically detect players who may have addiction problems and helping them accordingly. A company designed to care for its clientele may breed far more trust than the the traditional style of casinos, who are only out to make as much profit as possible.
Can Blockchain Technology Fix Everything?
Blockchain technology is very new and exciting. Although it feels like it could be a possible cure-all for the iGaming industry, will it be able to provide games with the same ease and entertainment that the current online websites do? There is a certain merit to using cryptocurrencies for an online gambling website, but after the initial awe wears off many users may want to revert to traditional gambling websites. But even in the event that this scenario comes to pass, there are still several reasons why the iGaming industry should work hard to keep itself decentralized:
- Distribution is far easier using a decentralized approach since gambling regulations vary heavily country to country, often based on the websites’ ability to regulate customer usage. With built-in blockchain technology, such as KYC (know your client) and AML (anti-money laundering), it is easy to control who is able to gamble.
- Transitioning iGaming to the blockchain guarantees the utmost transparency and existing centralized companies will be able to validate their games through decentralized companies in order to prove they are using fair practices.
- Government regulation is impractical on a global scale, given that every country will want to pass their own set of requirements for online gambling websites. Market self-regulation is key to continued success on a global scale because it will help keep the decentralized iGaming industry far more consistent across the world — meaning that no matter where you are from or where you are playing, you will be able to place the same trust in the networks.
Blockchain technology isn’t magic, of course, and it can’t automatically fix the iGaming industry. But what it can do instead is create a healthy ecosystem of decentralized nodes that support specific online gambling websites, prevent the need for sensitive customer information through the use of smart contracts, allow for greater profits since the house will more often have the same odds as the players, and make money through various means instead of strictly through players losing. This change in mentality throughout the industry has the potential to lead to several positive changes, particularly the change of total transparency; the rules, how much information is being collected (and for what), and exactly what the winning numbers/cards/slot chances are.
The Future: Blockchain-Infused iGambling
The blockchain is gaining traction in a large number of industries. But with every single new implementation of the technology, it seems that there are three more ideas in development. From changing the way people think about futures contracts to helping redesign the music industry in a more artist-centric way, it appears as though everything that blockchain technology is combined with sees positive results. When it comes to iGambling, there are various small hurdles for the industry to overcome before it can flourish. But blockchain technology holds the key to easily overcoming all of them (bad reputation, low rewards, addiction).
But are all of these changes positive? At first glance, there appears to be a few negative outcomes in regards to blockchain implementation, like forcing users to learn how to use cryptocurrency wallets and deal in cryptocurrency. The games themselves may be altered if they are run through smart contracts since the third party element will be removed, but even with the small shifts in the way the underlying architecture of the games function, the enjoyment will remain the same. Think of it more in the sense of playing cards with your friends instead of playing cards at a casino. In some cases the level of excitement and enjoyment may grow alongside larger jackpots, faster payouts, and an all around more transparent gambling experience.
Decentralized iGaming platforms like Luckchemy will certainly be a great option for gamblers seeking to experience blockchain-based alternatives for a number of reasons. Gambling on a decentralized platform is far safer for user data since customers don’t have to send in their credit card information, personal address, or other sensitive data. Specifically, Luckchemy will also offer far larger percentages of jackpots than modern lotteries, and with everything being traced through smart contracts and blockchains, customers can rest assured knowing that they are being given fair odds in their gambling endeavors.
Where to next?
Only time will tell if iGaming will continue to grow in popularity, but given the rising trends over the last few years and the recent legislation that passed in a few states in the US to allow online gambling, one can assume that the trend in popularity will continue upwards. Combine this with the growing trend of blockchain technology utilization and suddenly the perfect scenario comes to light — transparency and accountability through decentralization that speeds up legalization for more states within the US (a $450 billion industry). After all, who wouldn’t want more favorable odds, guaranteed fairness, and increased security surrounding their gambling entertainment?
About the author:
Kirill Shilov — Founder of Geekforge.io and Howtotoken.com. Interviewing the top 10,000 worldwide experts who reveal the biggest issues on the way to technological singularity. Join my #10kqachallenge: GeekForge Formula.