Why DAO.Casino is Ethereum for Gambling

“The web was designed to be decentralised so that everybody could participate by having their own domain and having their own webserver and this hasn’t worked out. Instead, we’ve got the situation where individual personal data has been locked up in these silos. […] The proposal is, then, to bring back the idea of a decentralised web.”
Tim Berners-Lee, World Wide Web inventor

In this post DAO.Casino would like to talk not just about our project, but what decentralised web can bring to the gambling industry and how to bring decentralised web to the gambling industry, about decentralisation and trust, protocols vs siloes, users and participants.

When we started to work on DAO.Casino we tried to imagine how would online gambling industry look like if no parties had to trust each other to cooperate.

Past few years of the information age has been dominated by the giants — each striving to create their own bubble, their silo, own and control their users. There is an expression about business models that currently prevail on the internet “If you don’t see a price tag, you are a product”. The services these giants provide might be useful, and many internet users no longer sense that they are owned, trapped in a silo and their information being monetised. 3rd Zuboff’s law says that “Every technology that can be used for surveillance and control will be used for surveillance and control” and it’s probably true.

This is not how we imagined the internet — we imagined it as a network that will empower people and businesses, not ruled by a few companies that mind control and own them.

Since Internet is probably the most life changing thing our times, many of our relationships became software defined relationships, but most of the software we use online is controlled by a third party.

That’s why we got hooked on 2P2 protocols and systems, and on Ethereum in particular, shortly after it came about, nearly 4 years ago.

And that’s why we decided to build DAO.Casino on top of it — a decentralised protocol for gambling industry, an open protocol that anyone can integrate with.

Protocols vs Siloes

Protocol is a system of rules by which a communication can happen. One of the goals of protocol specification is interoperability. A goal of a silo is to reduce interoperability as much as possible. Human language can be looked at as a protocol, you can look at the money as not a medium of exchange or storage of value but as a communication protocol.

Ethereum is a protocol that allows agents (people, businesses, machines) to make agreements without trusting each other. These agreement can be made because they are executed automatically, and exactly in a way that they have been programmed.

For the past couple of years we saw that a lot of experiments on Ethereum are about gaming and gambling. Individual games and even Ethereum based casinos offering a bunch of games. Even though they can potentially integrate with each other, since contracts on Ethereum can, individual games don’t make an industry.

There are many business and technical processes as well as relationships that take place in the area of gambling and make it tick: referral programs, bankroll backing, development and ownership of the games, random number generation that determines game outcomes. Instead of making more games or a casino we decided to implement these processes on Ethereum and remove the need in trusted third party, so that all these parties can interact. Now all these relationships happen P2P.

The world have seen automation of business processes, but not yet automation of trust. And our prediction for “blockchain killer app” is exactly automation on a value chain level. We will

Protocols on top of protocols

Some wonder why build another gambling specific protocol on top of Ethereum, since people can build interoperable games already. DAO.Casino is a gambling industry specific ecosystem, which, we think is necessary for adoption.

In a decentralised cryptoeconomic context dao can be defined as an ecosystem application. Casey Kulhman of Monax proposed this term instead “decentralised applications” Casey specialises in permissioned chains, however this term makes sense for both public and permissioned systems. Applications that run on the network on the technical level, define relationships and incentives on the social one, and not controlled by a central authority form ecosystems.

Ethereum is great, but we can’t expect any game developer or an online casino operator will suddenly become an Ethereum junkie like ourselves, or even care about decentralisation or implement, for example, an automatic referral system from scratch for each game.

Technology adoption cycle identifies 5 categories: innovators, early adopters, early majority, late majority and laggards.

In decentralised tech communities you end up hanging out with innovators and mad scientists, and then you will wonder why the web got awfully centralised again.

Ethereum itself and other decentralised protocols such as IPFS or Secure Scuttlebutt caters for innovators and mad scientists, but if we want to be ambitious about adoption, let’s actually think about early adopters and even early majority — work on tools, templates and systems that they can actually start using (gosh, without reading Ethereum whitepaper, or knowing what Casper is), same as people don’t have to know what TCP/IP stands for in order to make a Wordpress site about cooking (yes, it is infuriating, but they don’t and it’s a good thing)

There is a lot of sense in building protocols on top of protocols on top of protocols, and avoid silos. Or call them, if you like, ecosystems. Example would be — you can either build a centralised cryptocurrency exchange — a silo, or something like Shapeshift’s Prizm, that is build entirely on a system of contracts.

Let’s be honest, the skill base in decentralised tech is still very small, Ethereum even smaller, and even if it grew a lot for the past couple of years programming for decentralised virtual machine can be tricky. Internet really didn’t catch on before it became easy to work with, before people started using templates to build sites for example. Ethereum, no matter how exciting it is, might actually experience “if we build it they will come” issue.

It’s getting better: teams that work on tools and documentation, on the ecosystem around Ethereum already made it easier, but someone had to work on it. Our contribution to this would be, apart from automatic reward distribution system, also game contract templates and libraries that the devs can use to create their custom games with.

Cool thing is, on systems such as Ethereum you wouldn’t need giant centralised platforms like Appstore but to reach out your audience through incentivising folksonomies and content discovery.

Cool thing about ecosystem applications that they scale differently. There will be no problem integrating DAO.Casino ecosystem into, let’s say, a charity ecosystem, where a game can automatically distribute a percentage of the revenue for a charitable cause: all that without anyone needing to trust each other.

Participants vs Users

Ironically there are two industries where people are called “users” — illegal drugs and software. When we wrote our whitepaper describing protocol’s architecture it felt weird to call people “users”, because what they do is participate. That’s why we couldn’t find a better word than participants: bankroll backers, game devs, PRNG providers, referrers (and players of course)

Online gambling industry is pretty massive. Because people like to play. If we can bring decentralisation to this industry, we can really bring a lot of users onboard of the decentralised web, and perhaps even stop calling them users, but participants.

Decentralised web based on protocols, not siloes, will be more favourable towards smaller businesses. It goes hand in hand with the shift from mass production towards tailored and individualised products and services and a lot of industries will change, not just gambling industry.

Can we answer how it will change? We can estimate that the competition landscape might look entirely different again. But how it will look like would be mostly a wil guess. Because decentralised market is an insanely complex system. And because no third party will ever control it.