How gambling dApp’s will disrupt the online casino industry
The online gambling industry has become highly lucrative, with experts predicting a global valuation of $59 billion by 2020. As a result, the number of new operators entering the industry is growing at a rapid pace, each hoping to get their piece of the market share. However, there is a new breed of competition on the rise, with a variety of crypto-projects looking to introduce a casino experience that relies fully on a dApp, instead of a centralized third-party. Allow us to explain exactly what a gambling dApp actually is and how it can completely revolutionize the industry.
What is a dApp
A decentralized application, otherwise referred to as a dApp, is a user-interface that performs a particular function without needing a centralized entity. Think about how Facebook operates. When you open an account and subsequently perform tasks such as uploading photos and videos, or sharing your current location, all of that data is held privately on the Facebook server. For you to actually access the platform, you must go through this centralized server, meaning that you are at the control of the Facebook team. You have no say over what the social media giant does with your data, nor who they share it with.
This is where a dApp is different. By utilizing blockchain technology, data is distributed across thousands of independent servers, meaning that no single person or authority has control over the network. Furthermore, by decentralizing the entire application, not only does data remain auditable on the public blockchain, but transactions can function without the need of a third party. Instead, through the innovation of smart contract technology, transaction execution and settlement is achieved upon pre-defined if/when conditions. So now you have a better understanding as to what a dApp is, let’s take a look at why the online casino industry is crying out for change.
Why do we need a gambling dApp?
As we mentioned in the example of Facebook, the entire online casino industry is centralized. What this means for the player is opaqueness, inefficiency and payment delays. To break this down further, let’s take a look at the issue of trust. When you deposit funds in to an online casino, you have to trust that the games they offer are true and fair, and that they are actually going to pay you out if you attempt to make a withdrawal.
Although online casinos normally display the odds of each game they offer, there are no mechanisms in place to guarantee that this is actually the case. Imagine playing online roulette for hours on end, only to discover that the operator is not playing by the rules? Unfortunately, in a system of centralization, it is not be possible to confirm this either way. Otherwise, you need to rely on trust.
Next, when it comes to opening an account, you are required to go through a significant amount of red-tape just to get started. Generally speaking, you will be required to submit a plethora of documents to the casino within 72 hours of joining or when you make your first withdrawal request, whichever occurs first. This is to ensure that the casino remains compliant with national regulators and will most commonly involve a passport and proof of address. However, online casinos are known to demand additional documents with the view of delaying to withdrawal process. Again, this is highly unfavorable for the player.
A further issue relates to inefficiency. If you are fortunate enough to get through the rigmarole of opening an account and sending in documentation, you will then be required to wait days on end before you receive your winnings. Traditional payment providers normally take three working days to process a transaction back in to your account, however you are also at the mercy of the casino’s payments department, which might take an additional few days before they initiate the withdrawal request.
The interesting revelation is that these unfavorable burdens have not hindered the growth of the industry. Why? Because there are no other options. That was until the creation of a gambling dApp!
How will a gambling dApp change the industry?
So now that you know what a dApp is and why the casino industry is in a state of disarray, let’s take a look at how blockchain technology is the solution. First and foremost, when it comes to trust, there can be absolutely no question as to the legitimacy of each game. This is because every spin of the wheel or roll of the dice can be independently verified on the public ledger. Not only does this ensure that the pre-defined odds are true, but there is no way for the online casino to manipulate the outcome of a game. This would otherwise not be possible if using the services of a centralized fiat casino.
A gambling dApp also solves the issue of never ending red-tape, as the end-to-end gambling experience is completely anonymous. All that is required to engage with the software is a cryptocurrency wallet. In fact, there isn’t actually a need to even open an account. Instead, all the player has to do is transfer their stake in to the gambling dApp smart contract and that will execute the game.
Continuing on from the benefits of automation, there is also no need to wait days on end before you receive your winnings. In essence, as soon as the outcome of the game is determined (which could be anything from a slot machine spin to a sportsbook bet), the funds are automatically released. Either the player wins their bet and the winnings are returned to their wallet, or the bet is a loss and the funds are sent to the bankroller. Bearing in mind that, depending on the underlying blockchain, cryptocurrency transactions take no more than a few minutes to validate, which completely alleviates the need to wait days, if not weeks, to receive your winnings.