In a previous post (read here) we discussed how one blockchain solution may not be the same as another. Bitcoin and other decentralized cryptocurrencies have been on the rise in real-time online gaming and betting, however in most cases we have not seen any new payment solutions tailored to the gaming and betting scene.
In short, while a cryptocurrency typically is associated with a blockchain, it does not mean that a user or gaming provider using the currency enjoys the benefits of its decentralized cryptographic system. For instance, in the case of bitcoin, this is mainly due to the relatively slow transaction verification rate.
To clarify, let us consider the following example.
A user wants to place a bitcoin bet on a dice roll website owned by a provider. The roll has to be executed instantly and in case of a win, the payout should be instant as well.
Either the user has to have a balance with the provider, where the provider has a public bitcoin wallet set up and a single database keeping track of the balances of the user, or the provider only waits for one verification from the user’s personal wallet.
In the former case, the user has to trust the security of the provider’s single database. Overwriting this database would result in a lot of the users losing their balance within the provider’s wallet. It is obvious how this single database is not a distributed ledger (and a blockchain solution). Such a wallet may be very attractive for attackers, as its balance would be publicly visible.
In the latter case, the provider is only waiting for one node to verify the transaction, wherein the provider puts his trust. Additionally, a new address has to be generated for every new bet by which the user’s bet is identified. This may lead to usability problems, as the user may copy the address, accidentally refresh the site (creating a new address), and copy the first invalid address into the receiver’s field when sending the funds.
In conclusion, we can predict demand for true blockchain solutions for gaming. A true blockchain solution could address the problems listed above; it would provide practically instant transaction verification by multiple distributed nodes. Each player would therefore have their own wallet backed up by this blockchain (or sidechain) specifically designed for gaming, and each gaming provider would have the burden of security and responsibility alleviated from them.
Surprise: we are working on such a solution in close cooperation with online gaming & betting providers. Stay tuned ;).