The whole crypto world is obsessed with decentralizing everything and getting intermediaries out of everyone’s business, including gambling. In this article, we’re going to try to wrap our heads around decentralized gambling and explore how it works.
What Is a Decentralized Gambling Platform?
A decentralized gambling platform allows you to bet on sports, play casino games, and engage in other forms of gambling without dealing with a centralized authority like a casino or sportsbook. The whole platform is run via the blockchain, and you don’t need to trust a 3rd party with deposits, withdrawals, or even bonuses. These actions can be automatically baked into the blockchain.
How Do They Work?
Decentralized gambling platforms use Ethereum smart contracts, which are self-executing contracts with the terms of the agreement directly written into code. Smart contracts facilitate the creation and execution of bets. They contain the rules, terms, and conditions of bets, including the outcomes, odds, and payouts.
The two main features of decentralized gambling platforms are trustless and P2P betting. With trustless betting, an Ethereum smart contract holds and distributes the players’ funds based on the outcome of a prediction on a sporting event or the result of a casino game. Trustless betting removes the need for an online casino as the blockchain replaces the casino’s intermediary function.
With P2P betting, again, smart contracts are used to create wagers between individuals. For example, you could use a decentralized betting platform to create custom sports bets with your buddies. The odds, result, and payout can all be built into the smart contract, automating the entire sports betting process.
Advantages and Disadvantages of Decentralized Gambling Platforms
Decentralized gambling offers some clear advantages over betting traditionally through a 3rd party platform. There are also some concerns to think about before you dive in head first.
Advantages
- Transparency: The use of blockchain technology ensures transparency in all gambling transactions. Users can verify the fairness of games and the outcomes of bets because the data is recorded on a public ledger.
- Autonomy: Users have full control over their funds and bets. They don’t need to rely on a central authority or third-party intermediaries for transactions or payouts.
- Lower Fees: Decentralized gambling platforms often have lower fees compared to traditional online casinos, because there are no middlemen or intermediaries involved.
- Global Access: Anyone with an internet connection can access decentralized gambling platforms.
- Provably Fair Games: Many decentralized gambling platforms use provably fair algorithms, allowing users to verify that the outcomes of games are indeed fair and random.
- Privacy: Users can gamble with a level of privacy since they don’t need to provide extensive personal information to create an account or place bets.
Disadvantages
- Lack of Regulation: The absence of centralized regulation can make it riskier for users, as there may be fewer safeguards in place to prevent scams and unethical practices.
- Limited Game Selection: Decentralized gambling platforms often offer a more limited variety of games compared to traditional online casinos. You may not find as many options for table games, slots, or live dealer games.
- Complexity: Decentralized gaming is brand new and is currently not very user-friendly. Using decentralized gambling platforms may be more technically challenging for some users, especially those who aren’t familiar with blockchain technology or cryptocurrency.
- Lack of Customer Support: Decentralized platforms may not have dedicated customer support teams available to assist users, which can be frustrating when issues arise.
- Oracles and Data Feeds: The reliability of oracles, which provide data for settling bets, can be a concern. The accuracy of data feeds is critical for fair outcomes.
- Volatility: Cryptocurrency values can be highly volatile. The value of your winnings or bets may fluctuate significantly, impacting your gambling experience. For example you could start a betting session with 1 BTC being worth $30,000 and then by the time you finish your session the price could have dropped to $25,000, eliminating all of your profit.
What Does the Future Hold for Decentralized Betting?
Decentralized betting is brand new and hasn’t captured the minds of the masses yet. It offers some clear advantages over traditional online casinos and sportsbooks in terms of fees, autonomy, and transparency, but the complexity, lack of customer support, and regulation are going to hinder its progress. We here at FuturePlay News think it will be a while before decentralized betting catches on, it feels like crypto in 2011!
