This technology could potentially revolutionize the online gaming industry as it would allow both the player and backer to engage in decentralized casino games without needing a third party. An example of this is the sports betting sector. Once the player has selected their bet, the terms of the agreement are then installed within the smart contract. An underlying protocol known as an ‘Oracle’ is then able to independently scan thousands of trusted sources and determine the result. There can be no act of malpractice from either party of the funds are subsequently locked in to an immutable escrow that cannot be manipulated. Therefore, there can be only two outcomes. If the player is successful the winnings are automatically released to their wallet in a matter of seconds. On the contrary, if the bet is unsuccessful, the funds are released to the backer.
An additional piece of technology that was initially made possible by the creation of Ethereum is a decentralized application – otherwise known as a dApp. A casino built on top of a dApp works in a similar way to the current fundamentals of an online casino, however there are some key differences. Firstly, a dApp is decentralized, meaning that it has no central point of control. Essentially for changes to be made to the network, the majority of the Ethereum (or whichever cryptocurrency it is) must reach consensus.
As a result, an online casino could potentially function without an actual operator. Instead, players have the opportunity to transact directly with the gaming provider. For example, if one were to play roulette through a decentralized casino games, the smart contract would ensure that each and every gaming outcome was true and fair, which would then feed to the interface of the dApp. At the end of each roulette spin, the player would automatically receive their winnings or alternatively, the funds would be released to the bankroller.
A critic might argue why such a transition is required. Ultimately, the underlying blockchain technology ensures that each and every gaming outcome can be independently verified for its legitimacy. Moreover, as each outcome is cryptographically generated, it is beyond impossible for backers to amend, alter or change the outcome of a game. In the long-term, it is highly feasible that major operators will be a thing of the past. Instead, by combining both smart contract and dApp technologies, practically any gaming developer can set up shop in a trust-less environment.