Edgeless Investment Review

Blockchain Paper

9 min readJun 15, 2017

Edgeless is a decentralized casino app that is built on the Ethereum (ETH) blockchain.

Edgeless Casino Challenges which it will face in future :-

Marketing
Customer Acquisition
Profitability

Compared to other online gambling facilities, what makes Edgeless shine are its two core features:-

1.) Online casino is completely transparent

2.) 0% house edge.

What does it mean and how is this different from what we are used to when it comes to online gambling?

First of all, because Edgeless is based on the blockchain, the users of this online gambling platform are able to gamble in a safe, tamper-proof environment that is secure and fully transparent. The transactions that happen on this decentralized Ethereum blockchain application are public and anyone can verify that the games are run in a fair way. This is a feature that has never been possible to implement in the physical world, where operations are normally kept behind the doors to make sure that cheating and scams can abound.

Secondly, in this virtual, decentralized casino the house does not have an edge. The common approach, when it comes to online gambling, is to impose on the players a series of rules that put players at a disadvantage. To make things worse for who is investing money, in other online gambling platforms account deposits and withdrawals fee are imposed as a fee on the amount of winnings that the user has made while playing, in order to milk as much money as possible out of the player and maximize profits for the company that runs the gambling platform.

The most common saying about gambling is that the only way to be the ultimate winner at a game is to be the sole owner of the casino where the game is run. When online gambling became mainstream and more players flocked in to test their luck, concerns have been raised about how fair these platform are, if the code has been tampered with to give an unfair advantage to the house or a certain player, or if the withdrawal delays were accidental or carefully planned to keep people from leaving the game.

Such concerns are normal when it comes to Random Number Generation games, this type of gambling is heavily influenced by how aleatory the games are and players generally mistrust who’s running the machine that generates them. After all, who’d trust a gambling facility patron to offer a fair service, when he’s in charge with the money and the number crunching?

Being able to manage player’s money and game scores in a totally opaque environment is not the only advantage that dishonest online casinos have; they can also try their best to make sure that withdrawals are as complex as possible, and that it always takes a long time for the users to take the money from the house. Should that not be enough, the casino can always come up with excuses that justify freezing the user account or draining it completely, knowing that the player will probably not complain.

Now imagine a platform where the casino has zero edge and cannot tamper with the results nor the transactions.

Such an application, living on the blockchain, is not a new concept. There are already online casinos that utilize Bitcoin or Ethereum to let their customers play, and even gambling platforms that let you mine coins. What makes the decentralized playing platform Edgeless different from past attempts to tackle the problems that online gambling is filled with, are the totally independent ways the casino is run and the fact that the house runs it as “zero edge”.

Traditional online casinos that utilize fiat currency, debit cards or other online payment systems, normally have an edge that can run up to 15 percent of the odds. This helps the owners of the site to monetize but most importantly to cover the huge costs that come with running a casino connected to the players’ bank accounts and their excessive fund transfer fees. When it comes to gambling platforms that are un on blockchains or similar crypto protocols and ledgers — such as Bitcoin, Ethereum or Monero — the edge that the house has is up to one percent of the gains; a significant change from what online gambling management used to be like in the late 90s, thanks to the reduced fees offered by using crypto currencies as a mean of payment for operations on the site.

The centralized system that casino platforms normally run on is based on antique gambling structures, trying to replicate the economy of offline, in person gambling. This means repeating the same mistakes that happen in the physical world, such as having high fee costs and and an inefficient, centralized structure that is prone to bottlenecks, delays and most importantly attacks from criminals.

Pair these problems with the lack of trust that mainstream audience has on gambling and spending money in a digital environment, and it’s easy to see why people have such an aggressively mistrusting attitude towards such platforms. Most doubts about the fairness of online gambling is more than justified, considering how many times these platforms have been found to be playing tampered version of the software to give an unfair advantage to its owners, at the expense of the trust and wallet of the players.

To cover costs in such an environment is a difficult task for the casino, especially considering how expensive it is for them to deposit money from the player’s bank account, and every time they try to withdraw payments the user banks begin to get get worried about the nature of the website that is requesting money from one of their accounts. Online gambling rises suspicions among the financial industry and nobody wants to take the risk of dealing with a company that might run a rigged platform. Fortunately crypto currencies have fixed this problem, eliminating delays in payments and offering a safe environment where both the players and company that runs the casino can stop worrying.

Edgeless goes beyond that and, together with the complete safety of the blockchain and the transparency that comes with it, offers a casino experience where the house edge has been completely eradicated from the gambling experience.

This new, disruptive platform uses the Ethereum public blockchain to offer a completely transparent gambling environment to its customers. The RNG (Random Number Generator) is a decentralized application living on the ETH chain that is based upon the Smart Contracts technology offered by this platform.

A Smart Contract is a digital transaction protocol that works like a contract, enforced and arbitrated without the need of a third party involved as a trusted intermediary, for a fraction of the usual notary cost. The Ethereum platform has made such technology one of its main features, there programs can be run on the ETH Blockchain ledger and execute the processes they were programmed for in total autonomy as soon as the requirements indicated in its source code are met. The reason why millions of crypto currency users and companies trust Smart Contracts is that, once they have been programmed by a developer and implemented on the public ETCH chain, they can no longer be tampered with, making them as immutable as the contracts we are accustomed to in the physical world.

To make sure that the results are offered to the players in a completely aleatory manner, the management of the random numeric data generation is offered by WolframAlpha, one of the most famous and reliable computational engines that specializes in the generation of computed and curated mathematical data.

The integration of the gambling platform with Ethereum structure is guaranteed by London based blockchain service Oraclize.

This company provides a platform-agnostic oracle service, connecting decentralized applications to secure web applications. Because DApps are run on the blockchain enclosed space, which because of its nature must not be accessible to the open network, they cannot directly fetch data from any external source; this is where data providers like Oraclize play an essential role.

According to the founders, these service providers help Edgeless deliver a safe and transparent place for the gamers. Should any doubt arise on how fair this platform is, or on the validity of a transaction over the Ethereum network, they can independently run background checks using a block chain explorer such as Etherscan or Etherchain. The random outcomes of this gambling platform are executed in almost real time, and the way smart contract that are implemented on Edgeless make it impossible for the owners to freeze the player’s account or withdraw funds without permission.

Problems on the Ethereum network that might compromise the safety of the secure transactions this gambling platform relies on, such as the infamous DAO attack that happened on the 20th July 2016 and resulted in a loss of more than 3.5 million Ethereum coins, do not worry the company that runs Edgeless; in their opinion, like any other technology the blockchain necessarily had to experience a few mishaps to evolve. Programs do have bugs, and attacks such as the one that influenced the DAO are more than welcome if they help recognize and fix them. It’s a part of the natural evolution of things and open source, Turing-complete environment such as the blockchain can easily use these opportunities to get steadier and more reliable. These problems have not affected Bitcoin yet, and this puts Ethereum on the top stop for what concerns safety measures and guaranteed growth exactly for this reason.

At the moment the platform is targeted towards players that live in the Russian Federation or the European Union, but it is easy for US players to connect to this decentralized service by using a secure, anonymous VPN service.

As soon as developers will be able to guarantee smart contracts on the Bitcoin blockchain as well, Edgeless is planning to expand their operations in that crypto currency as well. There is already a project that is targeted towards this direction, called Rootstock. RSK is pegged to Bitcoin in a two way manner and allows individuals and miners to use Smart Contracts via merged mining, have high scalability and provide nearly instant payments.

After the successful implementation of a slot machine, in the very near future Edgeless is going to add several new games to its digital platform. After Black Jack, Lunar Poker and Ethereum dice, sport betting will be included to the system and guarantee an enormous impact in the market.

But how can a secure, decentralized gambling system where the house has zero edge on the game odds generate profit for the company that runs it?

Considering the mathematical perfection this system is run on, the core of its gains are going to come from people that are going to participate in games without having the necessary skills to win. In games that are based on a combination of luck and strategy, players need to pay constant attention to several different variables and keep track of statistics as they play. This puts unskilled, casual players at a disadvantage that will create profit for the house; the mistakes that happen when people carelessly bet on games they don’t know well enough guarantees to the house more a margin that surpasses 0.8%, which puts them in a clear advantage even over the most successful fixed edge gambling networks.

This strategy, paired with an aggressive reduction casino operational costs and higher fund transfer speeds, will guarantee a profit foundation; on top of this solid base the company is planning to add sport betting, which with up to a 5% margin will allow them to monetize easily.

As crypto currencies and platforms based on the block chain such as Bitcoin and Ethereum progressively becomes more mainstream, this use of the crypto casino is expected to grow as well in future .