Blockchain and Cryptocurrencies in Online Gambling

What is Blockchain?

The concept of blockchain may seem complicated at first glance, but it’s possible to break it down into a few simple concepts. The simplest way to put it, is that a blockchain is a time-stamped series of unchangeable objects of data, which are not owned or managed by any separate entity but is managed by a computer-cluster. This computer-cluster is part of what makes blockchain so special – there is no central authority, unlike most internet-based technologies. This decentralization makes blockchain a more democratic system than traditional information technologies and renders all of its information open and available for anyone who is interested. This makes blockchain fully transparent and holds every actor in the network accountable for their own actions.

Features of Blockchain in Online Gambling

While blockchain has been around since 2008, it was initially used mostly for trading in cryptocurrency, such as Bitcoin. Since then, blockchain has evolved into an even more reliable system, especially due to the development of what is called smart contracts. With these smart contracts, blockchain is able to deliver three main features that are of utmost importance for online gamblers.

First is accessibility. Where creating online casino profiles can take time and require you to share a decent amount of private information, the use of blockchain shortens these steps, letting you enter the gambling market simply with the correct blockchain address. This brings us to the second attractive feature of blockchain, namely its high level of privacy. You no longer need to share contact and payment information directly with an online casino, all you need to do is provide a link and a code to the account in question. Lastly, another important feature of blockchain is its potential for decentralization. Not having a central entity as owner and manager of the online casino means that players are more in control of the way the games and systems are sustained.

Benefits of Blockchain

As mentioned above, blockchain brings with it a set of features making it beneficial for online gambling, seen from both the player’s and the casino’s point of view. One of the first ways blockchain was introduced in online casinos was through payment options involving cryptocurrency. This option has benefits both for the player and for the casino, as it requires no processing by third party systems. This also makes online gambling available to a wider range of players, as cryptocurrency is purchasable by anyone, anywhere in the world.

In a broader view, blockchain may help both affiliates and operators feel safer and more at easy, due to the high degree of transparency. By using blockchain, you are making it that much harder for an operator to withhold commission or fake sale figures reported to affiliates, or for affiliates to run CPA fraud on operators. The safe contract technology of blockchain means that there is no longer any need for distrust between affiliates and operators, due to the system’s self-governing, self-enforcing protocol.

The decentralization and low cost of blockchain technology means that online casinos will on a much larger scale be able to create pop-ups and short-term operations. These can be used for special promotions, for testing out new features or systems and for temperature-checking new markets.

Potential Drawbacks of Blockchain

While blockchain in online gambling obviously has a lot of advantages, there will always be some potential drawbacks as well. Interestingly enough, some of these potential drawbacks come from the very features we also see as advantages of blockchain. First of all, the pseudo-anonymity of blockchain does open up for some potential for actors with less that pure intentions. While all blockchain operations are transparent and traceable, anyone wishing to run an illegal business would likely be able to do so, at least for some time. However, scams like these already happen with traditional online casinos, and so there is little reason to believe blockchain run gambling will be any worse than today’s situation.

Simultaneously blockchain driven gambling leaves less room for protection of players, in terms of age restrictions, uncovering unhealthy gambling habits and player registration. It will thus be up to the companies utilizing blockchain technology to find a way to still provide these services to players.

The Future of Blockchain

Not surprisingly, blockchain technology is making a massive step forward in the online casino market. There is every reason to believe that this technology will be one of the main focuses in the coming years, and players might as well get to know the ins and outs sooner rather than later. Not only will blockchain based gambling make online gambling more accessible to a larger customer base, it will also provide a much sought-after degree of transparency and honesty that many players, affiliates and operators are missing with todays systems.

While it’s difficult to say exactly how online gambling will change with the emergence of blockchain technology, it can be said with relative certainty that there will be changes. This might manifest in low to zero percent house edges on casino games, easier setups for user-to-user interactions and sports betting with instant, real-time updates.

With open source-codes for all games and interactions, it has never been easier for tech-savvy players to keep an eye on their money, their games and their information. It brings players closer together just as it brings the players closer to the casino itself, and it makes online gambling a more international venue than it ever has been before.