Although sometimes considered a vice, gambling dates back thousands of years and spans many ancient civilizations. Playing cards were invented in 9th century China, the earliest recorded pair of dice was excavated in Egypt, and scenes inscribed on ancient Greek and Roman pottery suggest that betting was a widespread practice across social strata.
Fast forward to the early days of the commercial internet and it was only a matter of time for gambling to come online. The first online casinos were launched in 1994 and since then the global online gambling industry has exploded, particularly over the past 15 years as mobile, internet-enabled devices proliferated and internet connectivity improved worldwide.
In recent years, the gambling industry has entered a whole new phase of evolution with the advent of blockchain betting platforms and the rising popularity of gambling-focused decentralized applications (dApps). Unlike their centralized predecessors, blockchain-enabled gambling dApps run on decentralized blockchain networks and are designed to work without a third-party intermediary — instead, they utilize hard-coded, self-executing smart contracts to automatically execute platform functions. This dynamic presents several compelling implications for the future of online gambling, such as enhanced user experience and provable fairness.
Blockchain and Gambling
Although today’s dApp ecosystem encompasses several different blockchain networks, the vast majority of dApps exist on the Ethereum blockchain. Developers continue to favor Ethereum because of its robust development tools, large community, and ample documentation. All of these factors have traditionally made dApp development and deployment more efficient and less costly than other blockchain networks.
However, a recent decrease in active gambling wallets on Ethereum suggests that its ongoing network congestion challenges are a significant issue for this user group. Congestion increases network transaction fees, also known as “gas” on the Ethereum network, which detracts from the user experience. In response to this issue, many gambling users are migrating to dApps built on less congested alternative networks such as TRON and EOS.
- TRON: The TRON network has become known as the “Las Vegas of blockchain” because of its success in fostering a thriving dApp gambling market. As of 2020, projects like RocketGame, 888TRON, and WINk are the most popular gambling dApps on the TRON network, and TRON gambling dApps account for roughly 60% of the network’s daily active users.
- EOS: Over two-thirds of EOS’ dApps involve some form of gambling. As of October 2020, the amount of value spent on EOS gambling dApps was roughly $4 million per day. DICE, which allows players to earn DICE tokens by playing games like baccarat, blackjack, and roulette, is the most popular gambling dApp on the EOS blockchain.
Together, TRON and EOS account for the vast majority of gambling dApp users and value transfers. However, emerging networks such as WAX and Binance Smart Chain (BSC) have also seen success with the release of Earnbet and RocketGame, respectively.
Gambling dApp Advantages
- Transparency: Blockchain betting platforms introduce greater transparency to the online gambling industry. While users must trust that traditional online gambling service providers operate in a fair manner, gambling dApps are able to unequivocally prove their operational fairness. As a public ledger, blockchain networks record all gaming activity — including payouts, wins, and losses — in a way that is both transparent and immutable. This dynamic eliminates the risk of fraud and ensures fairness given that every user’s record and transaction history is inalterable and publicly visible. The use of smart contract betting to facilitate this process also eliminates the need for third-party intermediaries, which further enhances the blockchain platform’s data integrity.
- Flexible Value Transfers: Gambling dApps transact in crypto tokens instead of fiat currencies. As such, users can fund their account and receive payouts using a cryptocurrency wallet instead of providing sensitive banking information like a credit card number online. Digital tokens can also facilitate rapid payouts with near-instantaneous settlement periods. The use of digital currencies facilitates access to crypto markets worldwide, thereby transcending national boundaries.
- Accessibility: Gambling must contend with regulatory hurdles in many parts of the world, and online gambling remains inaccessible in many countries and regions to this day. However, as gambling dApps exist on decentralized networks, they are inherently censorship-resistant in the sense that their underlying networks are not susceptible to a central point of failure or mandated shutdown. It is important to study the laws of your region or jurisdiction before engaging with any blockchain-based gambling dApp.
- User Anonymity: Traditional casinos require their patrons to provide various personal details to set up an account or cash out their winnings. This requirement extends to many online gambling platforms. By contrast, gambling dApps keep your information private by associating your network activity with a transaction address composed of a string of random alphanumeric characters. This enhanced level of anonymity allows users to transact on these dApps without revealing their identity.
The Future of Gambling dApps
For thousands of years, people have sought opportunities to take part in countless gambling activities, from card games and sports betting to modern-day casinos and their newer online iterations. Today, blockchain technology is enabling the next generation of gambling via dApps. Blockchain technology brings greater transparency, security, and accessibility to the gambling industry. As more people recognize these benefits across the broader market, gambling dApps may very well generate increasing value and drive future innovation within the gambling sector and beyond.