Kirill

Blockchain enthusiast developer and writer. My telegram: ksshilov

Should Online Casinos use a Blockchain-Powered Token?

There’s something inexplicably magical about casinos. Have you ever passed by a neon sign in a big city and stared at the glimmering, effulgent lights shining into the sky? Even though the house always wins (and casinos don’t even bother to hide that fact), there’s something piercingly beautiful about them. Nights out in Las Vegas come to mind, Caesar’s Palace in full swing on a Friday night, crowds of euphoric people, yachts, fireworks reflecting in the waterfalls… Anyway, the theory of probability states the chances of you winning big are the same as in a coin toss: 50%. So maybe all it would take is one coin toss but, in that case, would you still place your bet?
Online casinos have made it possible for just about anyone to become a part of the miracle Natascha Dow Schull warns categorically against in her brilliant book “Addiction by Design: Machine Gambling in Las Vegas.” This book should serve as a warning to be very careful when it comes to gambling, but even the millions of dollars poured into making casinos safe by the casinos themselves lately seems to have made the attraction even greater. After all, the adrenaline rush isn’t as enticing without the danger. But how enticing have casinos been lately? An illustration from casno.org speaks for itself: 

How do casinos work?

The truth is, just like all other genius concepts humankind has come up with, casinos owe their success to incredibly well-thought-out mechanics. Casinos can make your head spin in all kinds of ways, but nothing compares to reading a 200-page report dedicated to meticulously crafting the positioning of tables people can get lost in, the strategic removals of clocks in brick-and-mortar casinos, and the stupendous architecture of emergency credit card top-up mechanisms in the online versions.
Now, we neither advocate for casinos nor condemn them, and here’s why: we honestly believe that ultimately 100% of the responsibility for whatever happens to a gamer is in their hands. Approaching casinos responsibly is possible, and they will test one’s willpower, but so will the world in general. 
However, if you managed to completely understand the mechanics you could make million-dollar wins happen overnight. The problem with the mechanics of large structures, be it architecture, finances, or elliptic cryptography, is that it’s immensely complicated, but that makes it even more fascinating, doesn’t it? In fact, a casino’s ingenious design doesn’t mean the house ALWAYS wins; the famous blockbuster “Ocean’s Eleven” was based on a true story. The odds can still be on your side. And here’s how. 

Understanding the digitalization of casinos

Casinos work by collecting money from all clients and then giving out some of it to only some of them. That’s why the house always wins. Most online casinos are already using digital tokens in the same way all of them used to use physical tokens before. In fact, whenever you win (or lose) and the amount is displayed on the screen - you’re getting a digital version of your token. When you win a large prize in The Game Of Thrones slot machine, what you see is a digital token used to represent the real money you will (theoretically) get when you cash out your winnings.
Source: caesars.com
That digital version is then exchanged for physical tokens (dollars or other currency). Dollars are also, to an extent, a digital token, since they only represent real assets since the abolition of the gold standard by Nixon and are now only valid so long as the government is happy to exchange them for goods and services, but that’s a subject for another article. 
Now online casinos might change that. Some are now using the blockchain to take their transparency and wins to the next level, and the ones that don’t are left in the same position as the current banks that are faced with the prospect that Facebook’s Libra may well soon become the biggest bank in the world. 
“Will you shut up about Libra already?!” - An attentive reader will interject, guessing where we’re going next, but at the risk of your indignation, we’ll go ahead and tell you anyway: what you’ve been told a hundred times this week is highly likely to be correct. Facebook may well become the world’s biggest bank if it manages to collect as little as $1 from its every user. That’s just one example of how differently the future could look thanks to the blockchain. 
On another note, wouldn’t it be nice to once and for all forget about fraud? Or leave heaps of documents behind? The blockchain can help. It can also solve the problems with geographical access, inability to use banks, and having to wait for days for payments to clear - as well as significantly reducing withdrawal costs thanks to removing multiple parasitic intermediaries. 

How blockchain casinos handle bets and payments 

Online casinos use digitized tokens because it makes matters easier, and according to the statistics at the beginning of this article, it’s working. Digitization as a process offers immeasurable benefits for businesses. For example, “going digital” means opening up to customers from all over the world and not just the local area. 
Therefore, it’s logical that casinos would digitize as much as possible because they want to save their assets (pun not intended). Let’s take a look at specific examples. 
Among some of the most forward-thinking casinos that are using blockchain tokens are YOUnited, Edgeless, and Funfair. Crypto tokens used by these blockchain platforms have the same qualities as the digital tokens we talked about before:
  • Transaction times can be drastically cut down, which means faster payouts. 
  • Smart contracts mean your payments get calculated and delivered to you by the system, without the notoriously unreliable human factor getting involved. 
  • And the house can be completely removed for a fair, peer-to-peer experience.
Source: coindesk.com
Instead of “a large house edge of 1% - 15% plus deposit/withdrawal fees and 2-3 days withdrawal delays,” Edgeless relies on blockchain-powered tokens to massively improve payment effectiveness, resulting in “instant money transactions without or little fees.” Their new structure of payments is reducing the house edge to zero, while the casino’s main revenue comes from the “bad luck” of the players. They are estimating the average loss as 1.43%, which is a much better amount to pay than 15%. 
Having a business model based on winning odds can’t be trusted, unless you’re providing full transparency. “There is no way of knowing what is happening inside the casino’s servers and how the mechanisms are programmed. It can be easily rigged,” as stated in their whitepaper. Since blockchain records offer complete transparency, Edgeless is using Ethereum smart contracts to make it physically (if such a term applies) impossible to cheat, even if someone wanted to, while making sure the mechanisms “act each and every time how they are supposed to.”
A similar mechanism is used by FunFair too, where “each gaming session is sent to a secure, transparent escrow on the blockchain rather than a casino’s account.” Would you leave your money with the casino, which is definitely a biased party, or would you rely on programmable smart contracts (“casinos against fraud”, “politicians against corruption”, “bees against honey”, etc.)? That’s only possible because all betting funds are transformed into FUN tokens. 
Getting paid is the number 1 factor that influences gamers to choose a casino, and Funfair’s Fate Channel smart contracts offer an elegant way to transform current payment systems into next-gen systems in much the same dial-up modems transformed into the flashy Internet we have today. It means no more failed deposits, traditional ID document submission (dreadsome times, we can all still remember sending off our documents and waiting to be approved - or not - for eons), convoluted and terribly expensive payment processes.
Both casinos are mainly using the blockchain and tokens for payments and replacing the cash, chips, digital tokens with blockchain-powered tokens. Is this all the blockchain can change for the online casinos?
Actually, the blockchain can replace the actual casino (the house) with its smart contracts, as proven by YOUnited. YOUnited’s Proof-Of-Fairness means the standard clause you would expect from someone who understands the transparency advantages the blockchain offers that are so vital to a casino: “the immutability of records will assure that no data is altered, modified or manipulated by any party.” 
YOUnited has the main objective to “eliminate the house[‘s]” involvement in this industry in order to “introduce real ‘player against players’ solutions.” As all matches go on between players, the house does not want or need to get involved and manipulate the outcomes as before. Not only does 100% of the money come back to the players, but it is also mathematically impossible to cheat: “all parties can decrypt the inputs of other participants and obtain the collectively generated random number calculation.” 
In this new case, the usage of UNTD coins boasts a payout system that awards wins in under a minute (which take up to an hour with alternative blockchain casinos and weeks with the traditional ones). The whole ecosystem, from faster payouts and 100% Returns to Players to the most insanely complex peaks of elliptic cryptography, is built specifically with one purpose in mind: to benefit the players first. 

Last thoughts

Finally, should online casinos use a blockchain-powered token? Beyond the shadow of a doubt! With immeasurably better payout speeds, issues of mistrust are done away with with the help of fully transparent systems ready for anyone to check. Not only that, but costs are reduced by an order of magnitude, no more intermediaries, withdrawal fails, casino-intolerant banks, and now not even the house itself is the eternal archnemesis - it’s all gone! 
Source: xkcd.com
Better yet, the blockchain’s advantages are legion, but not even 1 percent of its functionality has been fully used, so we’re confident that even the tremendous pros blockchain-powered tokens offer now will be superseded soon by newer versions that will offer even more grandiose opportunities ready to be used immediately (like players’ wins). 
Stay with us. The future is here. 

Tags

Comments

More by Kirill

Cryptocurrency
Cryptocurrency
Education
Blockchain
Cryptocurrency
Cryptocurrency
Blockchain
Bitcoin
Hiring
Bitcoin
Credit Cards
Blockchain
Blockchain
Bitcoin
Messaging
Bitcoin
Topics of interest