It is amazing how far blockchain technology has come in a few years. While cryptocurrencies are taking up much of the discussion, blockchain can be deployed in gaming more ways.
The potential for blockchain in online gaming is huge. It will change some of the financial and legal issues in gaming, for example, Know-Your-Customer rules, and payment methods.
What does blockchain portend for the gaming and gambling industry?
The biggest attraction of blockchain is its open ledger system that is open and transparent for all. This is already happening in Provably Fair gaming sites, which promise more transparency in their betting system.
The Provably Fair algorithm is applied to each bet, and is viewable by all players in a game. It is easy to peruse the ledger of transactions, in case there is a dispute. This kind of transparency is alleviating issues of trust. People who were fearful of gaming can now trust the system better. It is no longer ‘The house always wins!’ but rather a question of ‘How did the house win?’
In Provably Fair gambling sites, the gaming server generates a server, while the client’s browser generates a client seed. There is also a nonce number which increases with each bet. Neither the server nor the client can change each other’s seed. The nonce number is also immutable by either party, and is visible for each bet.
Higher security is a big advantage of blockchain technology. There is no way of changing the public ledger once a transaction has been registered. This means that the gaming platform or the ‘house’ cannot change customer or game details even if they wanted to. This lends more confidence around customer deposits and withdrawals.
Lower Transaction Costs
Cryptocurrencies are decentralized. Crypto transactions do not go through the global banking system, which lowers transaction costs by a huge margin. Gaming platforms that handle billions of dollars in cash stand to save hundreds of millions in transaction costs.
This is a win-win for both gaming platforms and their clients, because clients also see a drop in deposit and withdrawal fees. Many gaming platforms have zero transaction fees for cryptocurrency deposits and withdrawals.
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Rapid Deposits and Withdrawals
Cryptocurrency deposits and withdrawals typically take less than 10 minutes to effect. This is unlike normal fiat cash transactions that have to go through bank confirmation systems. A bank wire transfer, for example, takes 2-3 days, during which the player cannot play. It is one of the best paypal alternatives.
Faster deposits and withdrawals keep the player liquid and able to get into more games. Again, this is a win-win arrangement for both the house and the player.
The privacy offered by cryptocurrencies has raised controversy because of money laundering fears. This is more so for online sites that have little to use in customer verification other than documentation, which can be forged.
This privacy concern for the authorities is a big attraction for players who need to maintain their privacy. Online sports betting, for example, is illegal in many US states. Players in these jurisdictions can play in casinos that support crypto deposits and withdrawals.
Some casinos do not need a player to register an account. This essentially means that the player is anonymous. Even if the authorities were to confiscate the gaming servers, there would be little information on clients.
Blockchain is changing online gaming for the better. Gaming platforms have little choice but to adopt it to attract clients who demand more transparency and security. The potential for this technology has just been scratched.