Crypto Casinos: Are They Really Changing The Online Gaming Industry?

Blockchains have blown their way into many industries on a powerful hype train, but during this rapid expansion and application of decentralized technology did we ever stop to ask ourselves - is this necessary? Sure, blockchains are a really clever database and have some seriously useful applications (cryptocurrencies, for instance), but have we gone too far by applying them to every field possible? The online casino has come a long way since its debut, such a long way that I’d argue blockchain is a bit late to the party. Is slapping blockchain tech onto online casinos an instance of “we’re doing it because we can” instead of “we’re doing it because we should?”

Source: azquotes.com

What are online casinos actually like?

Some would have you believe that online casinos are lawless wastelands where you punch in your credit card information and the next thing you know you’re fifty thousand dollars in debt and wanted in three countries. 

You may also think to yourself that online casinos are complete scams and their only possible savior is decentralization. Look, I’m not here to tell you that there aren’t casinos like that, which you should absolutely avoid like the plague, but the fact of the matter is that plenty of legitimate online casinos exist.

This space doesn’t need a revolution, that revolution came years ago thanks to regulators and most importantly, peer-reviewed online casino rating websites.

In the industry there are a few different ways to pick the bad apples from the bunch. The easiest way is to pay specific attention to the ways online casinos handle the following: odds, player experience, winnings collection, and reviews.

Odds

Computers cannot create truly random numbers without outside input; this isn’t their fault, it’s just something they simply can’t do. Instead, they can create pseudo random numbers that appear random from a human perspective, but if you had massive amounts of processing power you could probably reverse engineer them. No one has this computing power, which is why pseudo random number generators (pRNGs) are perfectly capable of powering odds in online games.

Player experience

No one wants to play games in a boring environment, either in person or online (if they did, they'd just play minesweeper all day). Online casinos almost perfectly capture the thrill and enjoyment of brick-and-mortar casinos; the trick is that they are often designed by the same people. Blockchain casinos tend to mimic online casinos because you can’t improve on perfection.

Winnings collection

This used to be a much bigger problem and if you look at a lot of the reviews of online casinos from the past you’ll see this more often: the inability to collect winnings, to withdraw, to process payments to a bank, etc. But the players got so fed up with this and stopped playing at those casinos - the rest learned not to get between players and their money.

Reviews

Websites that rate all online casinos and those that allow players to rate all online casinos are a fantastic jolt of accountability into the industry. Such websites exist to allow you to report bad-acting casinos, whether that’s because they’ve delayed withdrawals, their odds feel a bit off, they didn’t honor their sign-up bonuses, or many other things.

So this begs the question: if you’re having fun, being treated fairly, and everyone agrees there is nothing wrong… what’s the problem?

What has blockchain fixed?

Crypto casinos always point out one or two major “industry-breaking” flaws with modern online casinos. Either they are complaining that online casinos are cheating their player base, or they are trying to explain that using their token is safer for the player.

Frankly, neither of these are true.

Source: xkcd.com

If crypto casinos are creating a problem just so they can fix it, aren’t we taking two steps back to take one forward? Let’s take each of these “fixes” and break them down.

• Cheating: The way that crypto casinos claim to fix this problem is by using a blockchain to have an immutable record that players can go back through to verify the odds. Some even go so far as to claim that by using the blockchain they can create genuinely random numbers (not pRNGs), which are more fair (spoiler alert, computers can only generate pRNGs). Here’s the problem with the former, online casinos are already regulated. Sometimes an online casino is just an online counterpart to its physical location and it is regulated just as strictly as the brick-and-mortar location. In addition to this, do you know how to go back through a blockchain to verify individual calculations? No? So you’d have to refer to a third party to double check these numbers.
• Tokens: With tokens we finally get to the core of the “issue”. Crypto casinos have their own token, which you can buy using a credit card in some places, or by using other cryptocurrency in other places. That token is the core of their business, and supposedly saves the player grief and stress by making their lives 100 times easier. Sometimes they say that in addition to making your life easier with a token the house never wins, instead they make money on their token or through microtransaction costs. But is it any better to lose to other players than to the house? You’re still losing either way. Looking at the price of the token over time for some of the more popular crypto casinos tells the whole story that we need to hear.

Source: coinmarketcap.com

One of these projects, Edgeless, is currently offering a “jackpot” prize for 20,000 EDG. A year ago today that prize would be worth around $3,800, today it is worth less than $450. Can you imagine how frustrating it would be to spend all night gambing, only to wake up in the morning to learn that the token you won is worth half the price it was the night before?

Do we need blockchains for online casinos?

Short answer: no. Blockchains are absolutely fantastic for some use cases, and maybe 20 years from now every casino will be based on blockchain by default, who knows. There are too many variables like the cost of maintaining a decentralized network, electricity from non-renewable sources, efficient consensus protocols, and a whole slew of other issues that currently come into play with blockchains, so applying them to something like online casinos is frivolous at best. Online casinos are already regulated, already fun for players, and most importantly, they allow players to win money in their local currency so they don’t have to take 3 extra steps (convert crypto casino token to other crypto, then that crypto to fiat, then transfer that fiat to their account) just to access their winnings.

The bottom line is that as the online casino industry stands today, it is perfectly fine. Why fix something that isn’t broken?

The author is not associated with any of the projects mentioned.