How Blockchain Technology Is the Future of Online Gambling
One could say it is axiomatic these days that blockchain technology is the future of online gambling. Those who might not be on the cutting edge of crypto-currency might wonder how that can be, especially in light of the Bitcoin market’s drop in the past months.
People in the gambling industry see the benefits of blockchain technology. Calvin Ayre partnered with reputed Bitcoin founder Craig Wright to file over 70 blockchain patents with the UK government in 2017. Mr. Ayre, who (either from the inside or outside) has observed the online gambling industry’s growth from the beginning, said at a Canadian gaming conference that Bitcoin and/or blockchain technology was the future of the industry.
Everyone from Forbes and Business Insider to the American Association of Libraries have said that blockchain is the future of financial transactions. At various times, the technology has been describes as the future of banking, the future of entertainment, and the future of publishing. In short, it is the future, but you might might ask why.
Transparency & Cannot Be Manipulated
The quick answer is blockchain technology provides transparency and those payments cannot be manipulated. Any making a Bitcoin, Litecoin, or Ethereum payment can see every aspect of the transaction. It is there on the blockchain for all time.
Also, the nature of the blockchain means each unique payment has a unique security code. An identity thief cannot steal the code and use it later. Blockchain is safe, secure, and transparent. And yet, at the same time, it is anonymous.
Given that deep web sites like Silk Road used Bitcoin for transactions and the feds still unraveled the intricate web of payments, anonymity might be a bit much. Blockchain technology provides a higher degree of privacy than standard credit card or bank transfers.
Zerocoin: An Example
It goes beyond that, though. Blockchain designers are creating new systems which have profound implications for online gambling. Zero Edge claims it has created a crypto-currency for online gambling, ZeroCoin, which will provide 0% house edge gambling for users.
Zero Edge claims it can provide true odds and is building a platform to prove that claim. Using ZeroCoin technology, those who gamble would place bets at online casinos and online sportsbooks expecting a 100% return to player — if the player was lucky enough or skilled enough.
It sounds fanciful. Extraordinary claims require extraordinary proof, so Zero Edge has a lot to prove before ZeroCoin becomes a revolution in the Internet and mobile gambling industries. That proof will have to be forthcoming soon.
Zero Edge IPO
The Pre-ICO for Zero Edge launched on Febrary 28, 2018 and continues through April 27. On May 1, the Zero Edge IPO launches. If the technology works as advertised, Zero Edge (or similar systems) would replace all existing online gaming platforms.
They simply would undercut the market. Players would migrate to ZeroCoin in droves, if the system used provided a 0% house edge. The cost saving represented would be akin to Amazon’s advantage over brick-and-mortar retail competitors.
How Smart Contracts Work?
The driving engine of Zero Edge would be “smart contracts”. Instead of placing a wager at an online sportsbook and hoping an offshore bookmaker site eventually pays your winnings, the smart contract would assure instant payment and provide transparency at the same time.
Tomas Lukosaitis on Smart Contracts
Tomas Lukosaitis, the current CEO of Edgeless and formerly associated with Convi Design, Freelancer, and AIESEC, described how smart contracts work: “We use the Ethereum public network to deliver an entirely transparent experience for gamers. The Random Number Generation is based on Smart Contracts that once deployed cannot be tampered with, stopped or changed; and we have added is a Fairness Check into to the mix.”
FX Empire described Zero Edge in this way: “With Zero Edge’s blockchain protocol, Zerocoin holders are pooled into a mixing set, with the blockchain’s zero-knowledge proof ensuring that verifications can be made without the need to provide any information other than the fact that funds were deposited and withdrawn. The protocol means that coin holders are not required to provide additional information, including wallet addresses, which can and have been traceable on other blockchain platforms, ensuring complete privacy.”
It all sounds incredible. As a writer who has covered the online and mobile gambling industry for many years, it sounds like one of those claims which is too good to be true. But Zero Edge has competitors, such as China’s Dragon Inc., which is planning a crypto-currency for high roller gamblers. Multiple groups of really smart technologists and online gambling executives think blockchain is the next big thing.
After nearly 10 years of blockchain technology’s advances, though, the technology has proven to be a better payment system than anything which has come before. While the decentralized structure of the crypto-currency might scare some away (and perhaps should scare some away) from speculation, the blockchain technology underlying Bitcoin, Litecoin, and Ethereum is having a profound effect on how online gambling payouts work.