Guide to Ethereum Casinos
With faster transactions, lower transaction costs, revolutionary use of smart contract and possibly better prospects than Bitcoin, it will be only a matter of time for new Ethereum casinos to pop up.
Ethereum (Ether) has taken the crypto landscape by storm. Since its introduction in June 2015 it has become the second largest crypto economy in market capitalization just after Bitcoin. What differentiates Ethereum from other crypto currencies is that its economy is based on a platform that uses smart contracts. These smart contracts are a way of creating highly efficient economic and organizational systems that can be used for a wide range of purposes. From simple apps within a closed network to enterprise solutions, and of course including Ethereum Casinos! The new revolutionary form of gambling will distance itself from traditional online casinos – an industry where slow payouts, conflicts over winnings, and other forms of cheating are unfortunately prevalent.
How Smart Contracts work
The way smart contracts in the Ethereum network work it can have almost infinite use cases, and by many experts this can revolutionize the way we use crypto currencies. The basics of smart contracts are that they’re little ‘programs’ that use computer code which is stored and replicated on a distributed platform (Blockchain) and ran by the distributed platform resulting in ledger updates (Ethereum Transactions). An easier way to understand it is to take a simple transaction, and adding some conditions to it. So for instance, you can make an automated payment, say an automated deposit into your savings account, while adding some condition(s) to it. For instance, ONLY make the deposit into your savings account IF the balance on your checking account is higher than X. Adding those pre-written (pre-coded) conditions into a contract is what makes it ‘smart’.
The infographic below will illustrate this by taking a coin toss (or any very simplified casino game) as an example:
Increased Safety & Integrity
The nature of Ethereum, like other crypto currencies, makes it virtually impossible to tamper with, since all the smart contracts need to be verified by users in the network. Since the apps, including Ethereum casinos, built on this platform are decentralized, they follow the same safety protocols as the currency. While actual Ethereum casinos, built on the Ethereum platform, are somewhat scarce at the moment, in the near future we expect two trends. Many traditional online casino operators will start implementing payment gateways that accept Ethereum (ETH), allowing cheaper and faster transaction. But more interestingly, we’ll see full-blown Ethereum casinos which are built on the Ethereum platform using smart contracts.
Although prediction markets have found some adoption over the years, mainly in sports betting circles, they never really took off. Augur’s goal is to change this. The Ethereum token platform allows players to predict the outcome of future events in the form of binary bets (yes/no). As a player you can then bet on a “yes” or “no” outcome given certain odds – for instance, predicting if someone will become president.
Apart from serving as a betting platform, the so called Wisdom of Crowds effect will also be useful to governments, researchers, and other forecasters. Since large crowds are very good at making estimations, projects like Gnosis intend to leverage crowd sourced wisdom. Applications range from financial markets, to Insurances, to Governance. Apart from producing a new betting ecosystem, these type of prediction markets can have a majorly disruptive effect on politics, economics and social systems.
Dice & Roulette Games
Relatively simple games like dice and roulette have always been crowd favourites. They’re straight-forward, fast, and provide instant gratification. The first crypto dice game that really took off was SatoshiDice, which was Bitcoin based super simple dice app. You had to send some Bitcoin from your address to SatoshiDice, and whether you won or lost the bet made the system pay out you, or keep the bet as casino profit. To illustrate the popularity of this, a very significant part of the Bitcoin blockchain is filled with SatoshiDice transactions. Mainly because it was one of the first applications that required a high volume of transactions. When the Bitcoin ecosystem was new and mainly unused, this was possible. Now however, since the Bitcoin network is many times busier, transactions would take up to an hour to process!
Blockchain based casino games have made quite some progress since SatoshiDice, with a couple of Ethereum based dice games as front-runners, including Etheroll and vDice. Although it might not look like big progress visually, the main challenges for Ethereum Casinos are around scalability. Edgeless.io recently released a white-paper going more in-depth on the scaling-issues faced by them. It is clear where the bottlenecks are for crypto gambling, and major advances are currently being made in terms of lowering transactions cost (Gas) and increasing the speed of transactions.
These breakthroughs, together with the planned forks, which will also contribute to the higher efficiency of transaction cost and speed in a major way, we see a very bright future for Ethereum casinos.