D2W, Regulation and Crypto

Most of the gambling enterprises in the Blockchain space have failed to get properly regulated. Most Ethereum and EOS gambling DApps and projects obtained Curaçao licenses (if any at all) but have been unable to get first world licenses. There are a lot of reasons for this, but mostly it’s because there was no effort to design the DApp to be regulated in the first place.

And the even more gambling DApp’s don’t even bother to obtain any license, they just do not care!

But being part of the community, you should care!

Actually, it is sort of a crime, just like selling medicine without having it tested and officially approved. These sorts of behaviours are what damages the future of blockchain development. When companies do not provide registration or verification, they have no way of knowing if a 10-year old’s is gambling or if some oligarchs are laundering money. Unregulated ICOs, many exchanges, so-called Blockchain banks and insurance companies, many are guilty; all these projects that flaunted integration into the real economy just don’t work. In some cases, it is even worse — it is a fraud by nature.

Only those Blockchain projects that are in compliance with modern regulations including KYC/AML, have a chance to get a life and survive in the real world. Eventually, these other projects will be shut down — the idea they will flourish is nonsense.

The future of Blockchain projects is integration into the real economy in compliance with current governmental institutions and laws. Blockchain, like say, Electric cars, create efficiencies and reduce costs for everyone, but they don’t solve all problems. Nor does using the technology to circumvent regulations create any real benefit to society. In fact, using such technologies to subvert regulation only causes harm to humanity.

Online crypto gambling is not an exception. Gambling is a reputable business only when it complies with regulations developed in first world countries in Europe, the US, the UK and other countries.

Following regulation developed from decades of experience with 100s of fraudulent operators is the responsible and obvious way to obtain support for both Blockchain enthusiasts and Governments.

Illegal gambling is a crime in many countries and the lack of licenses makes it impossible for any serious development of illegal Crypto gambling using advertising and other marketing. As a result, the value of illegal Crypto online gambling enterprises tends to zero.

Several issues should be considered when thinking about Crypto online gambling and regulations:

The first issue is that regulators do not like cryptocurrencies. Since there is no real accepted worldwide regulation on how to treat cryptocurrencies, regulators are concerned with being involved in the space.

Other issues surround both age verification and KYC/AML procedures. The requirement is not to provide services to underaged gamblers, avoid jurisdictions where gambling is illegal (e.g. parts of the US), and prevent money laundering.

And the last, but not the least of the issues is the ability of regulators to understand, test and certify the technology that the operator provides to its customers. Regulators care about the fairness and security of operators systems too. For now, most regulators don’t have enough experience and technology qualifications to understand most blockchain casinos. This means that anything developed needs to be tested by third parties. But building things on a public Blockchain usually uses insecure third-party random number generators (“RNG”). Most so-called “trustless” operators using smart contracts are not really “trustless” at all (their RNGs are insecure!)! And then there are the operators using EOS that use smart contracts and pretend to be Blockchain operators, but in fact are not even Blockchain casinos at all! All of this is why regulation remains important. Players need to know that if an operator is “trustless” that someone independent from the operators verified that the systems are real, secure and fair! Few players in Crypto have the ability to know the difference between real “trustless” operators and fake ones.

But D2W is different. First, the entire technology was created by both Blockchain enthusiasts and former online gambling regulators, who understood all these issues. They knew all the tricks and pitfalls that operators and developers who lack experience in the industry don’t know. D2W is licensed technology created by Blockdraw and is the only online casino that is both provably fair and probably random. Blockdraw believes that this technology will bridge the gap between the needs of regulators and the demands of the Blockchain community. Darin Oliver, Blockdraw’s founder, has said that eventually, all online casinos will rely on Blockdraw’s method for creating “trustless” gambling that guarantees both the protection of players funds and security that gambling outcomes are not possible to manipulate.

He has the right to say so because he spent years regulating eGambling for the Alderney Gambling Commission. He also says that regulators will love and embrace this technology. He goes on to explain that Blockdraw’s technology could become the standard for the entire online gambling industry.

Another issue that Mr Oliver has explained, is that when you do an ICO and then make this token playable in your eGambling casino, it virtually destroys your chances to get regulated appropriately. For one, unless the ICO was all considered from an eGambling regulatory perspective, all the money that they collected selling this token could be considered as a player’s funds; meaning it can’t be spent to build the platform or pay other bills! But there are other issues, the token is unlikely to gain adequate liquidity eventually leading it to become worthless — then how is the platform able to migrate to another token without compensating the token buyers? Regulators care very much about the integrity of the operators! Is that integrity taking money for a worthless token? Instead of supporting the Crypto market and Blockchain community, these projects added their part in ruining the business development of Crypto.

The only way is to play by the rules; this is how businesses will succeed in bringing back value to Crypto, Blockchain, and Ethereum.