Online gambling is big business. The market value of online gaming is forecast to reach over US$ 56 billion by 2018. That represents an over fifty percent increase in less than a decade.
Digital tokens remain a small, but growing section of this business. As far as Bitcoin is concerned, gambling is very big business.
Until 2013 there was little else you could do with bitcoins. There were alpaca socks, Satoshi Dice, and the Silk Road.
Satoshi Dice was the largest bitcoin gambling game at that time. A clever blockchain based betting game, it counted for up to half of all transactions on the Bitcoin network at one stage in Bitcoin’s evolution.
Since then many more mainstream industry players have added Bitcoin to their platform. Software producers, realising the potential of digital tokens for digital gaming, quickly moved to start building for this new, interesting, open and secure platform.
Bitcoin is the only token that has managed to bridge the gap to mainstream gaming in any meaningful way.
There are of course a host of specialised games for smaller digital assets. Some larger crypto gambling sites also take a variety of tokens.
But none have really made a dent like Bitcoin.
Ethereum Smart Contracts
Developers are trying to change that. By leveraging the power of Ethereum smart contracts, they hope the world will take note.
Ethereum, as a scarce, blockchain PoW network-token is the same as Bitcoin. As a token it is fairly arbitrary to integrate Ethereum next to Bitcoin, for its unit value.
But Ethereum, at its heart, is fundamentally different. Its architecture is different. Its approach is different.
There is a robust and complete scripting language at Ethereum’s core. Any computation or logic is theoretically possible. In building gambling experiences, you are limited only by your imagination.
Through correctly implementing Smart Contracts, some developers hope to leverage the unique attributes of Ethereum to shake up gambling.
The ecosystem is quite young. So the experimentation is limited. Yet we are seeing some very sophisticated and promising decentralised gambling games on the Ethereum network, as Smart Contracts.
First off the block (pun intended) is vDice.io
This is similar in nature to Satoshi Dice, fully decentralised, and implemented as an Ethereum Smart Contract.
Randomness is tricky with Ethereum. There are limited ways to generate randomness for use on the blockchain. The relative merits of differing approaches is discussed here.
vDice has chosen an innovative approach to get randomness by doin this from a third party. Another 3rd party oracle then processes the bet using the random number source.
The result is provably fair, delivered to your betting address, fairly quickly. This feels just like playing old school Satoshi Dice for Bitcoin.
The Oracle here has an extensive library and impressive catalogue. They’ve come up with some clever approaches to provide security and certainty based on TLS notary.
Next up we have Rouleth. Rouleth, as the name suggests, is Roulette implemented as an Ethereum Smart Contract.
It looks competent and there is some clever development work here, especially to get bet processing time down.
Gas costs are still a little high. The code is somewhat long. Since the DAO hack that could make users apprehensive. Also, randomness is done on chain. Developers assure that their unique system is safe.
Games like this will need to bring these gas costs down a lot in future, to be viable. Also, if Ethereum is able to do faster blocks in future, then games like this will benefit greatly.
I like blockchain. So I appreciate how cool this is.
But what’s happening behind the scenes is not so important to an average user. Sometimes there is a decentralisation for its own sake approach. It can leave these sort of projects in the academic arena.
Anyway, Rouleth is cool. It’s provably fair. If you’re into Ethereum you should have a go.
Now, using dapps.ethercasts.com, we could find only 3 working gambling games, implemented as Ethereum Smart Contracts.
Ethereumlottery.io was the final one. I was unable to play because, it seems, tickets had already sold out for the next round by the time I arrived. I am left to wonder.
The game is a lottery which takes randomness from the blockchain. As the site admits, this can be problematic. So its novel approach is to use the Bitcoin blockchain for this Ethereum Dapp. Bitcoin blocks cross-chain are accessed using BTCRelay.
There is a budding ecosystem of gambling Dapps on Ethereum. It makes sense. Gambling is an obvious use case.
There is a lot of potential here. In future we could have a stable coin, either native to Ethereum, or ported in from another chain, like Bitshares. A pegged USD token would allow betting in Dollars through these platforms. This could seriously expand scope and appeal from a niche audience.
The possibilities are really endless with a Smart Contract. It will be interesting to see what the market continues to develop.