Blockchain technology in the online gambling industry
It has been more than twenty years since online gambling sites have enabled players to wager all over the globe. Online casinos and betting websites became even more popular since the pandemic, allowing users to continue their gambling habits from the comfort of their homes. Thanks to the wonders of modern technology, this has become a very convenient and profitable experience for players. The online gambling industry tries to keep up with the pace of the modern world, using more and more revolutionary technologies to keep existing users and invite new ones. One such technology is the blockchain. In this article, we will explain the meaning of blockchain and how it is used in online gambling.
What is blockchain, and how does it work?
The blockchain is a distributed database that allows for secure, transparent and secure transactions. A blockchain database stores data in blocks that are linked together in a chain. The prototype of a blockchain is dated back to the early 1990s when computer scientist Stuart Haber and physicist W. Scott Stornetta applied cryptographic techniques in a chain of blocks as a way to secure digital documents from data tampering. Although blockchain technology is older than Bitcoin, it is a core underlying component of most cryptocurrency networks, and it is responsible for keeping a permanent record of all previously confirmed transactions. Blockchain transactions occur within a peer-to-peer network of globally distributed computers.
How does blockchain technology affect the online gambling industry?
While online gambling is rapidly growing and the industry spends a lot of money and effort to ensure the security of customers, still the players are subject to regulatory restrictions, fraud and cheating by other players and disreputable operators. And here comes blockchain technology with its significant benefit – the elimination of any third party, or middleman, from being involved in the transaction. That is one of the most important reasons why the usage of blockchain technology in online casinos is growing very fast. More and more players demand security in the first place, especially when it comes to money and significant sums. Let us see what benefits can the implementation of blockchain technology bring to the gambling industry.
- Security. While there are a lot of criminals and hackers, that will never miss the opportunity to steal the money which goes into online gambling games, using blockchain technology can be vital against fraud. The blockchain contains all the information on every transaction, so players can be sure that their funds are safe no matter what. Blockchain transactions eliminate the possibility for hackers to steal players’ funds from a game or the site itself. Transactions take place directly between crypto-wallets, prohibiting the involvement of a third party and eliminating the need to pay a commission for the transfer.
- Transparency. Another important moment that is brought by blockchain technology is that it’s transparent and can be viewed by anyone at any time. This means that a casino, including a mobile casino online, with blockchain will operate on a free, open-source platform. This would create a fair and secure gambling environment for all players.
- Competitiveness. Using blockchain technology gives online casinos a significant competitive advantage. It can help to involve more users, game providers, partners and investors because everything in the game can be verified – from the players to the developers and all transactions between them.
Many of us are drawn to new and modern technologies. There are plenty of reasons why online casino operators are opening blockchain casinos and using cryptocurrencies, and way more reasons for users. The most important benefit for both sides is the transparency and security of all the transactions. But there are also things like speed, anonymity, and decentralisation. Withdrawal speed is essential for the players. And while traditional payment methods involve a third party, like a bank or a payment service provider, crypto payments work from wallet-to-wallet, and sometimes take just minutes to register.
However, there are also some complications with blockchain and cryptocurrencies: for example, due to the anonymity of transactions, governments could potentially see cryptocurrency gambling as an avenue for illicit funding. And let us not forget about the volatility of the currency, which can sometimes be gambling itself.Project: