The online casino industry has long been at the forefront of technological innovation. From the earliest days of the internet, there have been online casinos only a couple of clicks away. As time has gone on, online casinos have had to up their game in order to keep up with developments in terms of the complexity of the games and the security of their services.
What Technologies Will Affect Online Casinos?
Online casinos have begun to embrace a number of new technologies. Virtual reality gaming is now available, recreating the casino experience in VR. Virtually all the top online casinos now offer mobile apps so their users can game and gamble while on the go.
However, the most significant technology on the horizon, one that could disrupt the entire industry, is cryptocurrencies, as well as their underlying technology, blockchain.
What is Blockchain?
Blockchain’s most vocal proponents make all kinds of claims about its potential, some genuinely exciting, others apparently wilfully negligent of practical reality. There are numerous scenarios in which blockchain might be ideally suited, but in reality it struggles to offer tangible benefits over the existing options.
To understand blockchain’s strengths and limitations, you need to understand what, fundamentally, a blockchain is.
A database is a way of storing information. This can be simple information, such as names and email addresses, or it can be multidimensional information – multiple pieces of information on the same subject. For example, names, ages, addresses and contact numbers for individuals.
A blockchain is a decentralised digital distributed database, remember the 4 D’s. Let’s break them down:
Decentralized means that the blockchain is not stored in a single place. Instead, every member of the blockchain network has a copy of the database.
Digital is self-explanatory, this is digital information.
Distributed control of the network means that any changes are made by consensus, rather than being imposed by a central authority. The methods for obtaining consensus vary from network to network, but most use either proof of work or proof of stake calculations. As a result, some members of the network have more voting power by virtue of having more computing power or by being elected as a trusted node by users of the network.
But, how does this affect online casinos?
Trust and Transparency
One of the problems that blockchain aims to solve is that of trust. A centralised database, such as the one used by your bank to record all their transactions, for example, must be trusted to be useful.
A decentralized blockchain has no central authority; there is no ‘master copy’ of the ledger, it is distributed across the network. Changes to the database must be made by consensus, every transaction that is performed on the network is verified. Only transactions that are accepted by a majority of the network will be confirmed, no individual can alter the database.
Online casinos require a similarly high level of user trust as consumer banks. There are already a number of online casinos that utilize blockchain to improve transparency. Every transaction on a blockchain is recorded and can be viewed by anyone, but can’t be edited once it has been recorded.
Online casinos may soon find that they are expected to use blockchain to record all the transactions they are involved in to demonstrate that they are paying out appropriately.
As more casinos begin to allow users to gamble using cryptocurrencies, it becomes harder and harder to enforce the locality of online casinos. When spending or withdrawing money with an online casino using a normal payment card, this can incur additional fees and charges, all of which eat into your precious winnings.
Some cryptocurrencies charge fees to use, but others are completely free. For example, Nano is a cryptocurrency that offers instantaneous payments and costs nothing to use. A cryptocurrency in this mould could be game-changing for online casinos. We might even see the emergence of a cryptocurrency or blockchain-based tokens that online casinos all mutually accept.
Smart contracts are one of the most exciting aspects of blockchain technology. These are immutable contracts in the form of computer code. When certain conditions are met, the smart contract executes.
In the context of online casinos, this allows for games that are provably fair, with open and auditable code. Anyone can review a smart contract and ensure that it is fair, whereas otherwise they have to have complete faith in the game developers and the casino they are using to pay out appropriately and to run a fair game.
The online casino industry has traditionally been very effective at keeping up with new innovations and finding ways of incorporating them into their services. Virtual reality and augmented reality make online gambling more interactive, but it is the potential impact of blockchain on the online casino industry that is the most significant. Blockchain could address the lingering image problems that online casinos have, proving once and for all that they are fair to players.