How Does Blockchain Technology Impact On the Online Casino Industry?
Developed to keep a track of transactions using Bitcoins, the world's leading cryptocurrency, blockchains may alter the way gamblers think about online casinos. Although the rise in popularity of the online casino is well-documented, there can be little doubt that the industry suffers in one key area. Unlike traditional casinos - where gamblers are aware of the house advantage that they are playing against - an online version may be able to mask how much house advantage there is. The most popular games played in a traditional casino may offer the house an advantage that is as low as one per cent. Gamblers accept this, even if the house advantage for the particular game they are playing is a little higher.
On the other hand, when you are talking about an online gambling experience, players have little or no way to assess the house advantage. This does not put everyone off - there is an element of trust in every wager, after all. However, the latest technology is helping online gambling brands to build more trust. Those which embrace the use of blockchain technology, for example, are able to demonstrate just how trustworthy they are. Gamblers can view the transactions that are made by online gambling sites via blockchains and consequently assess those which are paying out regularly compared with those which are not so forthcoming with winnings. Given that many people, especially in don't even trust the banking sector with online financial transactions, the use of blockchains to assess online casinos independently is only likely to grow.
Essentially, blockchains provide a decentralised approach to storing data on gambling site transactions which mean that the casino can't cheat or make false claims. Nor does the gambler need to a trust a central server that is holding all of the relevant information because the process is decentralised onto a peer-to-peer network. Simply put, this means that if anyone tries to fraudulently change a record, it will alter all subsequent records - or blocks in the blockchain - so you would instantly know something was up. How has this technology grown in use?
The Development of Decentralised Applications
Sites that provide an online gambling experience for their customers have always needed to demonstrate that they can be trusted to pay out when a player wins. Testimonials have often been used in order to create a sense of trust with potential new clients. As well as being trusted to pay out, online casinos have tended to make a great deal about their record with storing personal details, especially banking ones, and of keeping them safe from hackers. The area they have often suffered with is how much house advantage they enjoy for various games. Especially when you consider the international nature of online transactions, it has been difficult for online gambling platforms to prove their house advantage is at the level they claim it to be. In a competitive marketplace, it has therefore been important for reputable sites to find a method for showing off just how low their house advantage may be.
The answer - decentralised apps which don't require trust to be placed in a central server which could be manipulated - came from the world of cryptocurrencies. Essentially, blockchain technology was developed to serve as a public record for all the transactions being made in Bitcoins. Invented by Satoshi Nakamoto in 2008, blockchains track all of the transactions made in the cryptocurrency for anyone to see, thereby overcoming the issue of Bitcoin double-spending. Their use helped Bitcoins to recover from their valuation drop in 2018. This public record keeping has helped to restore trust in the cryptocurrency. Other blockchains using similar decentralised applications are now in use to track the transactions made in real currencies, notably within the context of online gambling sites.
The Benefits of Blockchain Technology
Transparency for customers of online casino sites is, without doubt, the strongest single benefit of blockchain technology. Transparency, after all, builds trust in many walks of life. The peer-to-peer technology also helps with the demands of encryption and cyber security. Since gambling sites need to register users with a lot of personal data, so this needs to be stored securely. With a blockchain approach, this is not the case. You can be entirely anonymous if you want to, an important factor for gamblers who want to limit the amount of data they share online even with brands they may trust. Such are the potential upsides of blockchains in online gambling that the Kahnawake Gaming Commission, an organisation which has not yet issued any licenses to online casinos, has publicly stated that it supports the technology.