Feature: How Bitcoin Is Making Gambling More Honest
Since the first block was mined on January 3rd 2009, players have been opting to use Bitcoin instead of Dollars as a means to sidestep gambling regulators. Bitcoin, for better or worse, has given individuals from all over the world access to previously inaccessible markets thanks to the anonymity it provides.
Bitcoin gambling, which was kick-started by grass roots developers building addictive “dice” games, has now become a fully blown industry that has attracted industry giants and startups alike. What was previously a muddied and unregulated market has now become a booming sector that rivals some of the more traditional casinos in terms of quality and playerbase. But while the market grows in legitimacy, Bitcoin’s origins as a payment network for gambling and dark markets has falsely given too many the presumption that any Bitcoin casino is a scam.
Casino operators the world over have begun to consider deposits and withdrawals in Bitcoin. Players, attracted by the exorbitant rallies in the price of Bitcoin, have demanded casino support for the cryptocurrency in a hope of winning what is fast becoming the world’s “digital gold”.
The result has been acceptance of Bitcoin deposits and withdrawals at over 200 different online casinos, with major players like Bitstarz, mBit Casino and FortuneJack taking the lion’s share of the market. These casinos operate like any traditional online casino, providing slot software from the major players like Betsoft, Endorphina and NetEnt with many offering live dealers and table games.
While there are yet to be any Bitcoin casinos operating with a UK Gambling License, most are licensed by Curacao and the top operators in the market continue to serve their players without issue.
Provably Fair Gambling
Bitcoin is home to provably fair games. It was in the first few iterations of popular Bitcoin Dice games like Bitsler and SatoshiDice that provably fair betting became a mark of trust.
Provably fair gambling allows the player to check the outcome of a random number generator with a trusted 3rd party verifier to confirm the legitimacy of the randomness. Using some clever cryptographic proofs, provably fair games can guarantee that the roll of the dice or the turn of a card was not interfered with once the bet had been placed.
Before Bitcoin, probably fair gambling did not have a significant presence and players simply had to trust the casino to be honest. Many high profile cases of casinos acting unfairly towards their players have led to an increasing adoption of provably fair casinos – the vast majority of which are Bitcoin-focused.
According to Peter Mulligan, COO at The Bitcoin Strip, provably fair betting is the Bitcoin casino market’s fastest growing sector.
“In previous years we’ve seen players opt for Bitcoin due to its highly speculative nature. In 2018 we saw for the first time that players were becoming more educated about the benefits that Bitcoin brings, with 1 in 4 of our players opting for a provably fair casino over one that is not.”
Ethereum Smart Contracts
Beyond provably fair betting are the Ethereum smart contract casinos which have begun to emerge after several years of development. Smart contract casinos allow for players to bet through an on-chain Ethereum transaction, triggering the execution of programmed functions and the payout of a bet without any input from a human being. This type of betting ensures that the casino does not take custody of player funds at any point during gameplay, with payouts being made automatically without the possibility of reversal. There are no withdrawals as all winnings are paid directly into the player’s Ethereum wallet and the casino itself does nothing more than host the smart contracts for which it operates.
The code that underlies these smart contracts is also publicly available and so the logic of the casino game can be audited and checked for fairness by the broader community. Once a bet is made, the code will then execute as intended with no possibility of interference.
While Bitcoin heralded a major step forward in the way players trust casinos through provably fair gambling, Ethereum casinos stand to completely revolutionize the relationship between player and casino. Using Ethereum smart contracts, it is possible to entirely remove the need for either party to trust the other, making for an unprecedented level of fairness in a market that was once seen as cavalier.
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