Home|Blogs|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 |
8 min read
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.
When online gambling became available to wide audiences, it quickly turned into one of the fastest developing markets globally.
Thanks to crypto solution companies like SOFTSWISS, we have detailed statistics showing the incredible growth and popularity of cryptocurrency usage in online gambling. By December of 2021, wagers and bets placed in cryptocurrency were around 40% of the entire iGaming market, up from 23% in January of that year.
When compared to the same quarter in 2021, the sum of bets in digital coins in Q1 2022 has grown by a shocking 116.7%! It’s safe to say that blockchain has changed the face of online gaming forever. As a game development company, Innovecs Games believes that these promising projections are worth taking note of.
Blockchain Technology and Its Benefits in Online Gambling
In order to understand 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’s efficient power of transmitting and storing data benefits the iGaming industry in many ways, but here are just a few:
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
When you establish a gambling website as a business you bear a number of costs associated with regulatory payments, licensing fees, taxes, and payments for merchants. This can deter users due to higher costs and investments needed to cover these expenses. Fees from both 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
Another important thing to consider is that online casinos often are not trusted by banking institutions when placing deposits, and there are cases of people’s accounts being blocked after transferring 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.
Even with all its ups and downs, Bitcoin is the biggest name in the game. So much so, that online casinos will often convert other crypto payments into bitcoin for ease and reliability. As the global economy transitions to crypto and e-payment options and away from fiat currencies, more players are looking for iGaming sites that accept Bitcoin.
Bitcoin presents players with a safer and more secure way to make deposits and play their favorite online casino games. Funds can be transferred faster than a bank and it offers anonymity and credibility.
To recap, bitcoin gambling works like casino gambling: you choose which e-wallet is best for you, make deposits, choose a reputable casino, and play to win.
Overall Glimpses How Blockchain Empowers Getting More Revenue From Gambling Business
With a better understanding of blockchain technology, it’s easy to see the potential it has to disrupt the gambling industry by offering:
safety through decentralization of all the financial betting transactions;
quick data availability for users, which strengthens online casinos’ reputation and attracts more players and increases revenue;
secure data ownership: no single party controls all data, which guarantees reduces the risk of fraudulent activities;
robustness: data of bets, pay-outs, and deposits is stored for a long time without loss;
data transparency and verifiability: no need to apply to a bank for issuing your deposit records, it’s quick and easy to access 24/7 personal online gambling records.
From a developer standpoint, blockchain can reduce overall cost of website management and fees. It allows you to reach an expanding global market with easy scalability.
With such a promising mobile market at our fingertips, Innovecs is prepared to lead the way in utilizing blockchain tech in the iGaming industry. When you partner with Innovecs you have experts in art, technology and visual effects ready to collaborate on high quality, engaging casino games. You can contact us for any of your mobile gaming needs.