Home|BLOG|Blockchain In Gambling And Betting: Granted Fair And User-Friendly Data Management
Blockchain In Gambling And Betting: Granted Fair And User-Friendly Data Management
June 1, 2021
After online gambling became available to wide audiences, it turned out to be one of the most fast-developing markets globally.
The Bitcoin website shared the statistics throughout 60 crypto-based gambling platforms that every minute users are making 337 bets per second, and the target audience spends three BTC per minute.
Forbes discusses that on the one hand, betting is a tricky ground of addiction and fraud, but on the other, it’s human nature to take risks, and due to this human feature businesses generate high revenues.
Considering the global growth of this market, which shows a 9% annual increase rate (three times more than world GDP expanding), Innovecs as a game development company wants to make an introduction for its blog readers about blockchain technologies in gambling and betting as well as about glimpses of cryptocurrency gambling.
Blockchain Technology and Its Benefits in Online Gambling
Understanding cryptocurrency technology and how it empowers gambling, it’s important to be aware of blockchain basics. James Mitchell, the President of Bitwise.io, explains blockchain as a “shared database”. But blockchain is totally decentralized in comparison with an ordinary database. No party of the whole system owns the completed data set.
The main principle of blockchain utilization is that all people using this or that part of the information participate in sharing it under request. It excludes fraud, makes the system fair and safe for storing data.
Blockchain background in the power of transmitting and storing data is reflected in the following issues:
it doesn’t need much time to share data, which is the advantage for betting (users do not like time-consuming operations);
it gives all the participating parties the same protocols excluding fraud risks, which is extremely important. The gambling field is treated as a cheating one quite often, and this blockchain feature contributes to the industry’s reputation.
A lot of incredible use cases in the gaming industry are empowered by blockchain. It becomes possible due to this technology P2P (peer-to-peer) operational principle granting decentralizing, and outstanding data safety. Even if some data parts are malicious or faulty, the whole information still keeps its integrity because it’s stored and split into small pieces in a variety of places duplicated in many nodes.
Decentralized payment methods
Once you establish a gambling website as a business you should bear a number of costs associated with the regulatory payments, licensing fees, taxes, and payment for merchants. At the same time, your gaming resource can become less attractive for the users due to high transaction value in case they need to invest real money via bank payments. Fees both from the gaming resource side and from the users’ side decrease the profitability of the business. Cryptocurrency, as a decentralized payment method based on blockchain technology, can become a solution:
it eliminates banking “maker” and “taker” spendings;
it prevents users from the fact that payments are associated with their personal identity (this anonymous participation brings more players to your business);
low international transaction fees contribute to your business scalability;
easy mobile payments via apps ease gaming business operations and make the number of loyal users grow;
accessibility to cryptocurrency enlarges your business’ target audience because it may include people without real banking accounts.
Jeff Kauflin, Forbes’ blockchain and fintech expert, notes:
“Crypto entrepreneurs have a possibility to reinvent standard and traditional financial tools due to blockchain decentralized architecture existing outside of companies’ and governments’ control”
Your gambling website attracts users and makes them stay for long in case they have the possibility to win money immediately. In case you use banking payments it takes some days to hold money, then to approve financial transactions with many risks it would be blocked by the bank.
Blockchain technology enables the existence of special URLs for any operations with the funds. Applying this technology, the owner of the gambling website:
has no need to bear security costs to store money and guarantee payments for the winners;
obtains high safety level in terms of hacker attacks;
feels free from the necessity to manage the users’ funds.
Andrew Michael, an associated UK cryptocurrency expert and journalist, shared his opinion concerning the discussed option:
“FCA estimated in summer, 2020, that in the UK two million adults owned cryptocurrencies with the purpose of gambling safe with easy payments”
Gambling Smart Contacts Enabled By Blockchain
The gambling industry involves a number of sophisticated processes, and even under efficient management, they demand a lot of investments to make the gambling website operate well. With blockchain, you work on a decentralized platform where all interactions with your clients are managed with the help of smart contacts. It’s safe, low-cost, independent, and performs automatically with no need for any third-party interference.
IBM explains the sense of smart contacts clearly and plainly:
“It works like “if…then’’ And what is good about this way of interaction is that nobody can change the agreement or the outcome. This boosts mutual trust and safety”
Decentralized Gift Cards As A Way To Increase User’s Loyalty
Blockchain increases the variety of methods to capture players’ interest. Alongside attractive and well-tuned online ads or special perks system for loyal users, you are able to utilize cryptocurrencies as vouchers from retail markets, similar to gift cards. Moreover, as we discussed above, every user even with no banking account can get prepaid bonuses.
Gift cards slots is a widespread online casino benefit because they:
minimize theft or lost risks;
easy to issue, purchase and use;
have no specific pre-set limits or rules of usage;
Personal info or any identity authentication are not needed, so the user can come to you any time and enjoy user-friendly use of prepaid gift cards with no association of his or her financial identity. This fact proves blockchain really grants new possibilities to scale your gambling business.
Forbes spoke with the CMO of Bitbook.ag, a crypto casino having launched its own token, Filip Poutintsev, and he told:
“Blockchain and cryptocurrency is a buzzword of the tech world. And no wonder that blockchain entrepreneurs are willing to the enter gambling market because it has huge potential to be disrupted due to distributed ledger technology”
Poutintsev in his interview outlines the challenges of the gambling market such as people’s demand of betting fairly and being secure with their deposits, which are crucial to be addressed by blockchain technology. Let’s look deeper inside how it works if you consider the mentioned benefits of blockchain technology that can really contribute to your gambling business operation.
How Blockchain Empowers Gambling And Betting
One of the most important facts is that online casinos are not trusted by the banking institutions while placing deposits, and there are cases when people’s accounts were blocked after transmitting money for online gambling.
Of course, blockchain will not increase the number of lucky winners, and will not change online casinos’ reputation, but this technology is granting huge opportunities to keep the records of bets, results, and pay-outs to make it trustworthy and clear for the players. And that is a key issue in online gambling.
Blockchain technology is utilized for decentralized gambling operations giving a clear and trustworthy foundation for the players. They should not worry about the safety of their deposits, about accounts blocked right after huge winning and big pay-outs scheduled. All the financial transactions are recorded, stored, and performed in a secure manner and they are available all the time for the players to be checked.
Journals.plos.org arranged a deep study of the phenomenon of decentralized casinos using cryptocurrency bets. They issued a profound research paper where they analyzed 2 232 741 transactions from 24 234 unique addresses to three applications operating Ethereum cryptocurrency over 583 days.
This substantial study compared players’ activity in this technologically advanced domain with those, who are not using tokens. And the amount of the spendings of one player is $110 per average of 6 bets, which is two times higher than in the online casinos with banking deposits. They proved more intensive activity by counting how much money is spent while betting.
One more peculiar feature was the comparison of the annual spendings of cryptocurrency empowered casino players with that of standard online better: the first one tends to spend less at first sight, but after analyses of the heavily involved players of decentralized gambling platforms, researchers concluded that they invest heavier.
Cryptocurrency Gambling: Bitcoin Gambling And Its Convenience
Players spend millions of hours online performing bets in a variety of cryptocurrencies, but bitcoin is the most popular one. Let’s look through the mechanism of the gambling platform functioning, where bets are made in bitcoin.
There’s a step-by-step scheme on how to spend your bitcoin cryptocurrency to play in an online casino. Let’s see what kind of betting has obvious benefits both for the players and for the gambling business. Knowing this, you are aware in which way blockchain grants more opportunities to be profitable for your gambling business:
it’s anonymous (sometimes banks can check and block the accounts, which is inconvenient for the players);
funds can be transferred much quicker than in the bank;
clear scheme of moving the funds (transit from the bookmaker to your bitcoin wallet, withdraw money from your wallet, and perform an exchange operation).
In such a way many more users around the world are involved in legal gambling being not dependent on the banks’ strict issues, which sometimes limit their betting activity.
Reddit illustrates a positive gambling experience gathering the successful examples of the players.
To recap, bitcoin gambling works similar to casino gambling: you just decide on the e-wallet you are safe with, make deposits without any bank security checks, choose a reputable casino, and play to win.
Overall Glimpses How Blockchain Empowers Getting More Revenue From Gambling Business
After reading the blockchain technology profile it’s possible to agree it has huge possibilities to disrupt the gambling industry due to the benefits for data storage management:
safety through decentralization of all the financial betting transactions;
quick data availability for the users, which strengthens a lot of online casinos reputation and attracts more and more players raising revenues to the sky;
secure data ownership: no party owns data totally, which guarantees to minimize the risk of fraudulent activities;
robustness: data of bets, pay-outs, and deposits is stored for a long time without losses;
data transparency and verifiability: no need to apply to a bank for issuing your deposit records, it’s easy and not time-consuming to have access 24/7 to personal online gambling records.
Blockchain makes the gambling industry more trustworthy and clear for the players, hence, it attracts more deeply involved users, eases spending money for them in the form of secure cryptocurrency deposits, and boosts the gambling domain profits.
Using blockchain technology you have higher chances to save costs for website management and operation, to invest less in security and safety of the users’ identity and transactions, to boost the revenues due to the huge and easy audience expanding globally as well as scaling your business or utilizing cryptocurrency gift cards promotions.
Once you have ambitious dreams to lead the gambling market, Innovecs is the right partner with high expertise, able to provide top engaging casino games development combining art, technology, and visual effects. It could become an outstanding collaboration for the development of high-quality gambling products if you decide to contact us.