How do smart contracts work in the crypto and online casino world 🤝
What is a smart contract? It’s a computer protocol at its core, specifically designed to offer, verify and then enforce the performance or negotiation of a contract digitally. Basically, smart contracts are smart because they happen without a third party overlooking everything. You can use smart contracts with money, shares, properties and basically anything else that has value that can be numbered. All of this without needing the help of a bank or a notary public, for example.
Let’s compare the smart contract with something abstract, say, an ATM. In order for a contract between you and another person to happen in real life, you’d have to go to a notary or a lawyer, pay them and then wait for them to have your documents ready. With the help of a smart contract, you’re literally putting some cash into the ATM, as in, some Bitcoin, after which the ATM spits out the contract you need. And it does it every time in the same way, without fail.
Smart contracts are great because they not only state how a contract will behave from now on to eternity, but also they’ll automatically enforce any obligations that one of the parts decides to break. Smart contracts happen on the blockchain, a distributed ledger that’s decentralized and actively sustained and monitored by the users.
Five reasons why smart contracts are amazing
No. 1: Autonomy – If you’re using a smart contract, you are in charge of the agreement between you and whoever you’re making it with. There’s no lawyer, notary or broker involved. There’s no way a third party could manipulate the contract, as the execution of the contract is solely managed by the network and cannot be tampered with.
No. 2: Backup – It can happen that your bank loses your savings. It does and it will happen again. If you’re on the blockchain, every single person on the ledger has your back, sort of say. The documents you are relying on are duplicated endlessly and stored, but without anyone being able to interfere or even see them.
No. 3: Trust – Smart contracts are encrypted on the ledger that’s shared with everybody. You simply cannot say you’ve lost your files.
No. 4: Speed – Remember the last time when you’ve had to sell something, or bought something using a lawyer and a notary public? Remember how many days and hours you’ve had to wait for the documents to be prepared? With a smart contract, the waiting time is reduced to seconds to maximum minutes.
No. 5: Safety and accuracy – All smart contracts are safely stored in a cryptographic environment. Breaking the codes that lead to the core of smart contracts is virtually impossible. Also, because the smart contract is fast and automated, there’s no room for error in their implementation, so smart contracts are as accurate as they can be.
Smart contracts in the online gambling world
Ever since the invention of the internet, the gambling industry was one of the first to fully embrace the new technology and profit from it. Every new year, the experience of online gambling gets better and better for both users and providers. The next generation of technology that’s working to improve the online gaming experience is the blockchain, a new way of working the web that’s as disruptive as the WWW was 20 years ago. Adding the smart contracts, the blockchain is able to take gambling on the web to an entirely new level, filled with advantages for both parties.
The online casino industry of now
If you’re not a very trustworthy person, you’re going to be having a problem with the current online gambling scene as they solely rely on trust from players in order to operate. Most of the operators are in fact trustworthy, yet some have taken advantage of gamblers and undressed them to the bone of their money.
As soon as you’ve put your money on the platform of a casino, that money is entirely at the disposal of the said gambling provider. Also, there’s no way of being sure the provider is not tempering with the random number generator that’s at the base of the entire online casino and basically dictates if an outcome is positive or negative for the players.
Implementing smart contracts in online gambling
Decentralizing the online platform where people play their favorite games solve the problems associated with a centralized one by default. For example, you are still the owner of your Bitcoins even after making an online deposit, which means the provider has no control over your cash. Also, because the games are run on the public ledger and also with the provably fair algorithm in most cases, there’s no way the provider can temper the software code and therefore create an advantage for the house.
Decentralized gaming is impossible without the help of smart contracts. Smart contracts take the work of humans who are constantly checking an operating casino’s internal processes and transactions and put them in code form, away from any possibility for errors or mishaps. As soon as the human aspect is removed from the games, the cheating possibilities that both the provider or the gamer have are also out of the way, allowing for a completely fair experience on both sides.
Advantages of smart contracts paired with online casinos
Besides the advantages described above for smart contracts being used in online gambling, here are some more that will make you reconsider the way you gamble online. Probably the most important benefit that goes straight to the players is that of anonymity. Using smart contracts allow players to keep their personal information safe and private, as they should be, if that’s what they want.
Playing your favorite games on any normal platform happens just after a long, tedious and not so brisk process of registering and identification. With smart contracts, everything happens anonymously. This means there’s no risk for your information to be hacked or for your cryptocurrency to simply vanish out of your virtual wallet.
Another great advantage is the one regarding costs. Because smart contracts are implemented and then are left to work autonomously, there’s no need to hire personeel to take care of banking, customer service or anything else. This is great for players as they’ll have less of a fee to pay whenever there’s a transaction happening, as well as for providers as they can repurpose more of their earnings into creating new games and developing their businesses.