5 Problems in the Gambling Industry Solved by Blockchain
5 Problems in the Gambling Industry Solved by Blockchain
The blockchain technology is on its way to become a part of our daily lives. Big enterprises are implementing modern blockchain solutions in their businesses. However, there are industries in which the blockchain technology and cryptocurrencies can interact at a deeper level. Gambling is one of these industries.
The traditional online gambling platforms like casinos or games don’t ensure transparency to their users. There are many doubts about the real results of the games, winnings of customers, personal data security and others. There are reasons why people give up playing or betting; they are not confident about these services anymore. With the implementation of blockchain, online gambling platforms can restore their trustworthiness, and, as a result, bring back new users. But how exactly can blockchain technology change gambling today?
Unsurpassed Growth of the Gambling Industry
The online gambling industry exploded into the market a few decades ago and has become a successful multi-billion dollar industry. Current gambling platforms provide access to various games and activities at the tip of your fingerprints. Online gambling is definitely at its peak, and statistics show the business and the number of users is growing rapidly. The main principle of online gambling is betting money or something valuable on activities as poker, casinos, sports, lotteries and other games online. According to the report made by Statista, the online gambling business had a volume of 37.91 billion U.S. dollars in 2015, and, according to forecasts, this will increase to 59.79 billion U.S. dollars by 2020. The numbers sound promising for the future of online gambling. What is more, the investigation made by BusinessWire has shown online gambling is legal in 80 nations. Europe is in first place in the online gambling market. The high incomes of users and special regulations allowing this kind of activity help European markets make about 47.78% in the global gambling industry. The Middle East and Asia share second place and have 30.79%, while Northern America has 12.9% of the global market.
Challenges Blockchain Overcomes
There’s no lack of additional benefits like security and privacy for any business dealing with money. Blockchain technology can improve it through cryptography. In the traditional online gambling and betting platforms, the games are controlled by the owners, which allows them to change the results of the game. While information about the process of the game and the results are hidden from users, there’s a question about the fairness of the game. The number of customers decreased because they didn’t have access to game information and lost their trust in fair gambling platforms. However, blockchain solves this and many other problems existing in online gambling.
How Blockchain Disrupts the Gaming Industry
Currently, online players continue to face many concerns with online gaming sites, including data insecurity, the lack of information transparency, high fees in money withdrawing, and fraudulent activity. Below, we explain how blockchain overcomes these obstacles as well as the opportunities it brings to online gambling.
The lack of transparency and trust
Problem: People associate gambling with fraud. It was proven by the study conducted by the British Gambling Commission in 2017. Players think online gambling is far from fair because they believe online gambling platforms have special software able to change the result of a game or its process in the operator’s favor.
Solution: Blockchain technology based online casinos or sportsbooks like Bitbook make their transactions transparent and accessible to every user. The gap between operators/owners and customers doesn’t exist anymore. Players can begin to trust in fair gambling.
2) The possibility of fraud
Fraud and leakage of important information cause trouble in each industry through money or customer losses. Many online gambling platforms require the personal information of users, but they can’t guarantee it is secure.
Solution: Security of information is what blockchain is about. First, the information stored in the blocks is hard to hack and change. The Bitbook company goes further because credit card information doesn’t need to be kept on the platform. Players are required to share a minimum of their sensitive data to be used by the Bitbook’s global online casino and sportsbook.
3) Long-awaited payments and additional fees
Withdrawing money on a credit card or bank account is not the best option because banks can confiscate money or block the transactions from gambling platforms, which leads to payment delays or other financial issues. Furthermore, in case of money withdrawal or bank operations, customers may need to pay commissions or unexpected fees. The transactions can fail or be impossible to process.
Solution: Modern online gambling platforms use various cryptocurrencies allowing fast operations and payments in comparison with fiat money. Cryptography technology ensures user security and privacy and exempts the possibility of money being blocked/confiscated by third parties and by limitations of money deposits. Also, cases of failed transactions and fraudulent activity are lower than before.
4) No rewards for customers
Players are not rewarded by casinos for their loyalty; in case they lose, they do not receive any sort of compensation. That’s how traditional gambling businesses have lost their customers.
Solution: To keep users engaged, modern online gambling platforms return some money to players in accordance with their monthly losses or propose special bonuses for them. A unique feature of Bitbook is that the platform gives back its customers 10% of their losses back every month. This has become possible due to lower transactions costs with blockchain technology.
Casinos follow special regulations to make the process of registration, account creation and verification more difficult. Users are required to submit valuable personal data that is stored on the gambling platform, leaving it vulnerable.
Solution: Blockchain allows users to bet and play by sending cryptocurrencies to the provided address, and do not fear the possibility of their personal information being stolen. Anonymity is one of the best benefits blockchain has brought to the gambling industry.
Cryptocurrencies and blockchain-based technologies change the structure of online casinos and the way they work. Online gambling is reaching an entirely new level of transparency and credibility. Obviously, blockchain technology has become a powerful tool for solving problems in our society and economy. In the gambling industry, these problems have been strongly felt. Cryptocurrencies, cryptography and blockchain are the future of this sphere.