First Things First: What Is Blockchain?
If you are an absolute beginner, think of blockchain as a chain of records. Each record is a “block,” and this chain continuously grows. Every record is linked to each other and encrypted. These records basically contain transaction data. It is virtually impossible to modify this data because every record checks each other and verify the information. Moreover, these records are kept on a peer-to-peer network. They have no central server. In this regard, they are similar to financial records of the banks but not the same. Banks keep their data on central servers, and it is possible to hack them. Blockchains, on the other hand, are impossible to hack because there is no single server that the hackers can connect: every user on the network holds a copy of the data and even if you manage to hack one of them, other users will “correct” the mistake.
Now, these records can contain all kinds of data, not only transaction info. You can store medical records in them. You can upload documents. Any kind of data you can imagine can be stored in these chain of records. It is even possible to run applications on the blockchain. This is a big, decentralized, and distributed network: You can put anything on it, and it will simply work without the need for central servers.
How Blockchain Is Used in Online Gambling
By saying “you can put anything on it”, we mean it: you can store all kinds of applications and data of websites on the blockchain too. For example, it is possible to host an entire online casino and put all of the infrastructure required (such as games, payment systems, membership records, etc.) onto the blockchain itself. An online casino like this will need no servers to work. It will run on a distributed network, and all of its data will be verifiable. Remember that records check each other to verify the stored data? That can work for online casinos too. For example, the RTP rate of a slot machine cannot be changed after it is placed on the blockchain. The system itself won’t allow that. So, as a player, you do not need to worry about someone intervenes with the system: It is simply not possible. Moreover, there will be no need for electronic gambling licenses and audition companies. But before we continue, let’s take a closer look at the relation between iGaming and blockchain technology. At the moment, online casinos use this technology in two ways:
- As a payment method only. The casino still runs on a central server. Blockchain and therefore crypto-currencies are supported only as a payment method. As of now, this is what the majority of online casinos do. This practice still offers an advantage, but it cannot provide the full benefits of blockchains. The data and games of the casino can be easily changed, and this is why they need to be controlled by third parties, i.e. gaming licensors and audition companies.
- As a way of service. This type of casinos run entirely on the blockchain. They are the true blockchain casinos. They have no server. All of their data is stored on the blockchain. They need no audition because this is done by the blockchain itself. Naturally, payments are done over the blockchain too.
Pros and Cons of iGaming Blockchain Technology
The advantages of blockchain casinos are:
- Anonymity. Players are not forced to provide their personal details to become a member. Everybody is anonymous over the blockchain. You can register with just an email address.
- Faster Withdrawals. There is no need for ID verification since everyone can stay anonymous. Once you win, you can withdraw your winnings in mere minutes, simple as that. The transfer will be completed in seconds. Moreover, some blockchains (such as Ethereum) provide smart contracts, which send the winnings to your wallet automatically.
- Provably Fair Gaming. You can be sure that the games of blockchain casinos are fair. This is not an impression: You can literally check the fairness of each game you play. Players are the auditors, and the RTP rates are always visible.
- Fewer Fees. Payments and withdrawals over the blockchain require almost no fees.
- No Restrictions. Governments and tax offices cannot track the players. You can keep playing even if gambling is prohibited in your country.
- Higher Winning Chances. The house edge of blockchain casinos is as low as 1% because of the transparent fairness. This rate is around 5% – 7% at regular online casinos.
And here are the disadvantages:
- Anonymity works two ways. Casino owners are anonymous too. So if the blockchain they are using does not support smart contracts, they may decide to close up shop and disappear. There is nothing you can do – cryptocurrencies cannot be tracked.
All transactions are final. There is no “chargeback” on blockchains. You cannot cancel a payment after you made it.
Not Just an Influence: It is the Future
Blockchain casinos will change the online gambling industry completely. Today, an online casino must pay very high fees to auditors, licensors, and even banks. They must hire a server and protect it against attacks. And even after making all these investments, some government can restrict access to their website. Running a regular online casino costs a lot.
Now imagine a future that is free of licensors, auditors, tax offices, and banks. Players can directly connect to a casino without any restrictions. They can make payments and withdrawals from anywhere in the world and complete the transaction in seconds. And they will always be sure that the games are fair. Sounds good, right?
Such a world is not just a dream: It is already happening. Blockchain technology provides benefits to both casino owners and players. Day by day, a new blockchain casino is opened, and they have the potential to eliminate even the biggest brands in the industry. Blockchain technology removes the need for a middleman and connects to service providers and customers directly. It is the future of everything, not just online gambling. Get ready for a revolution: Blockchains will rock your world, and you are about to witness history.