Will smart contracts revolutionize the online gambling industry?
For those of you that are unaware, there is a new piece of technology that has grown in stature over the past 12 months and it goes by the name of a smart contract. Built on top of the Ethereum blockchain, a smart contract allows two or more people to enter in to an agreement without needing to trust the other parties. Instead, all of the pre-defined agreements are built in to an immutable set of code, meaning that conditions cannot be amended or changed.
The only way a smart contract can be executed is once the agreement has been fulfilled. Moreover, execution can be done in an autonomous manner, meaning that no third party intermediary is required. So how does this relate to the online gambling industry?
A good example of a smart contract facilitating gambling transactions is blackjack. Under normal circumstances, the outcome of an online blackjack game is in the hands of the online casino. All of their gameplay data is subsequently kept behind closed doors, meaning that there is no way for the player to know if the outcome is fair.
However, by utilizing the benefits of smart contract technology, the outcome is generate by the blockchain. As we now know, the blockchain protocol is immutable is hack, so it is virtually impossible for the casino to manipulate the outcome.
Once the player deposits the required funds in to the smart contract, this would then generate a new cryptographic seed. In plain English, this means that the outcome of a Ethereum blackjack Games is generated in a completely fair and random manner, all of which is available to view on the transparent blockchain. As soon as the outcome of the game is determined, the smart contract will automatically release the funds.
Ultimately, a smart contract casino can remove to the need for players to trust the casino. By alleviating this role — will we see a new breed of online casinos in the coming years?