Blockchain Archives - Bill Carmody

In the online gambling industry, the application of blockchain’s technology assures players the protection of their money before a bet is placed and that the odds and subsequent results of their bet were generated fairly.

In 2018, the online gambling industry is expected to surpass $50 billion. A study by SuperData Research found that mobile gambling was up 75% year-over-year, and that it now accounted for over 25% of all gambling. And yet, there is a lack of transparency in knowing which sites are safe, honest and trustworthy. With an estimated 1.4 million fake websitesbeing created every month, any successful online gambling site is at risk of being spoofed by hackers looking to take advantage of unsuspecting players.

Though the majority of online gambling sites are reputable, the industry lacks an effective means for a player to verify the reliability of a site. The mark of a “good” gambling site tends to be a byproduct of their reputation. Players are inclined to gravitate towards these sites, not because of third party validation, but rather the reviews they receive. Players are trusting that the recommendations of strangers on a forum or subreddit channel.

Blockchain Brings Trust to Online Gambling Sites

Despite the incredibly hyped blockchain bubble, the underpinnings of the technology hold substantial promise for bringing the element of trust into online gambling. By integrating blockchain technology, all parties benefit from the permanent record of a verifiable, unchangeable transaction ledger. In other words, an online gambling platform using this technology provides transparency at the transaction level.

In 2018, many industries have started to investigate how blockchain technology could solve specific problems. What is clear is that the infrastructure underpinning Bitcoin and other cyrptocurrencies has applications that extend far beyond creating a digital currency. The unalterable open ledger that a blockchain provides, viewable to anyone, has captured the attention of programmers looking to create transparent platforms in every sector, from shipping to charity.

In the online gambling industry, the application of blockchain’s technology provides players with assurance of where their money is going and that their results were generated fairly.

Going Deeper with Smart Contracts

The Ethereum blockchain in particular has focused on the concept of a smart contract. This is a digital agreement between parties, whose terms could be enforced by computers and would add the element of transparency to any transaction. With an impartial network insuring the contract is adhered to, any potential obstacles to transparency have been eradicated with blockchain technology.

With an online gambling blockchain in place, there is no obfuscation of the rules, which are clearly legible to all parties, and an instant payout is guaranteed. There are no concerns about a site withholding winnings, because there is no site governing the game. The player’s funds go directly into the contract (and, if they win, back out again), without a middleman interfering.

Adding Regional Legislative Requirements to Blockchains for Online Gambling

Several projects have launched initial coin offerings (ICOs) to tackle some of the issues inherent to online gambling. Noteworthy examples include FirstBlood, Monsterbyte and FunFair, significantly more complex than the early SatoshiDice. Many ventures appear to distribute tokens purely to profit from the influx of money into the cryptocurrency space, which seems a natural addition to gambling platforms; after all, casinos have been exchanging cash for tokens (in the form of chips) long before cryptocurrencies were around.

Regulatory compliance, on the other hand, is often difficult to carry out, which is where recently announced, JoyToken, looks to surpass the established ICOs. With regional variations in legislation, this approach lends further legitimacy to the ongline gambling industry by meeting diverse legislative requirements.

The project is launching a casino built on top of the Ethereum blockchain, designed to benefit both game creators and players with enhanced transparency and security. Game developers can integrate with JoyToken’s backend, which can then be played using the platform’s currency, the JoyToken, to place bets in a smart contract; thereby fostering a reliable ecosystem that benefits all parties.

The protocol is available to developers and can be used to create games compatible with JoyToken’s backend. Content creators can avoid the headache of getting the correct licensing, as the process is handled by the JoyToken platform itself; ensuring that online games will be legal and compliant wherever they appear.

3 things you need to understand in order to prepare for the transformative power of blockchain technology – despite the hype.

Given today’s blockchain bubble and stratospheric returns of many cyptocurrency ICOs, it is tempting to chase possible sky-high investments. Fear of missing out (FOMO) is real for most entrepreneurs. For many, it’s the late 1990s “dot com” boom all over again. There are scammers and charlatans all over the place during this Wild West phase and there is basically no regulation. Pump-and-dump schemes abound. In the crypto-markets, it is buyer beware.

But that is ok, because if you really want to profit from these technological innovations in the long run, your time may actually be better spent elsewhere. What is going on is the beginning of a critical change in how value is created and measured, made possible by the invention of blockchains, or perhaps more appropriately, distributed ledger technology (DLT).

I had an opportunity to speak with Jeremy Epstein, CEO of Never Stop Marketing and author of The CMO Primer for the Blockchain World. Some venture capital investors consider Epstein to be a “modern day unicorn” because of what he accomplished as the VP of Marketing during his time at Sprinklr. Specifically, during his tenure, the company grew from a Series A $23mm valuation with 30 employees to a Series E valuation of $1 Billion dollars with 700+ employees in 10 countries, serving 800+ enterprise brands.

Simply put, when a fellow marketer who helped grow a company to a valuation of over $1 Billion wants to talk about the future of technology, I listen … and I take really good notes.

A Quick Blockchain Primer

Epstein explained the core innovation of bitcoin, supported by the Bitcoin blockchain, is that it solves the “double spend” problem associated with digital technology. When you get paid, you need to trust that the asset you are obtaining in return for your product or service will have value in the future. If the other person in the transaction can easily make a copy of the asset, then yours will not be unique. As such, its value will be less.

This is why it’s ok if we both have a picture of your dog or child, but it’s not ok if we both have the exact same $20 bill. So, by creating an immutable ledger, secured by a decentralized network, we all know who owns what at what time. This is what is called “consensus.”

In this world, when a transaction occurs and you send .002 Bitcoin or Ether or any crypto-token to another person, the entire network is made aware of the fact that an asset has changed hands, so it cannot be used or “spent” again.

There are some members of the network, called “miners,” who invest their time and money in the form of electricity and computing power, to verify that you have it in the first place and to ensure that, once you have signed the transaction with your private key, you no longer have it.

Once they have completed the process, there is a mathematically elegant way for them to secure the network and distribute the information to others. For this work, they are rewarded with their own Bitcoins (or another token if they are using a different blockchain).

The key thing here is that each coin that is created (also called a “token”) is digitally unique, cannot be forged, and has a clear, indisputable owner. If you have the private key, you own the coin.

Assets and Value, Secured by the Blockchain

The implication of all of this is that we now have a technology that can cost-effectively represent assets in a unique way. Since the assets are digital, they are fungible. You cannot own a fraction of a Picasso painting, but you can own .0000023 of the token that represents the Picasso painting.

When you “tokenize” an asset and its uniqueness is undeniable, the asset has value. It may be large or small, but it is the only one of its kind in the world and that is worth something. Think about how many assets you currently have that are under-leveraged because the costs involved in buying, selling, or trading them are too high. This could include unused hard-disk space on your computer, bandwidth at your home that lays dormant during the day, or the family heirloom painting that you do not want to sell but could provide some liquidity. It’s possible that every asset will be “tokenized.”

The second implication is that asset control will stay with the creator until she decides to part with it. In the future, companies will have to pay you for the data they get for free today such as name, email address, phone numbers, and social media profiles. If you are the company, the same will be true of those you serve. If you want control of an asset, whether it is for a marketing campaign or a data feed to improve your crops, you will have to buy or rent it from the owner.

Finally, because these assets are digital, it means that they can be programmed, like a computer. The business and legal rules that currently surround an asset in the form of documents and contracts can be applied to the asset itself to govern its use.

The three things you need to understand in order to prepare for the transformative power of Blockchains are:

Asset Tokenization in ever smaller increments
Asset Ownership that is clear and indisputable
Asset Programmability that can reduce transaction times

Amidst all of the hype of crypto, these are the implications of blockchain’s arrival that are really going to change things up.

It Won’t Be Here Tomorrow, But It Is Coming

Blockchains are in their infancy and there are plenty of issues ranging from stability to security to interoperability, among others. The cryptocurrency craze is just a signal that the genie is officially out of the bottle. Whether you buy Bitcoin, Ether, Zcash, ARK or other tokens, is up to you. It may well be worth some of your time to understand them. The real value for you is to start looking at how your business might change if every asset is tokenized, owned by its creator, and digitally programmable. These impacts are especially important if you are just starting out in 2018.

Online Gambling Needs Blockchain More Than Most Industries