The Potential of Blockchain in Gambling and Gaming


As the infamous pandemic locks people home, they are looking for a substitute for once-beloved brick-and-mortar casinos, switching to online games and online casinos and thereby stimulating the growth of both sectors. The global gaming market has generated over $21.1 billion in revenues in 2020, which is 21.9% more than the previous year; the global gambling market is doing great as well: estimated at $65 billion, it’s climbing to its first hundred million dollars in an unstoppable fashion.

Pandemic aside, the most impact on gambling and gaming has been made by the technologies themselves. From 8-bit Super Mario games and one-armed bandits to the most graphically demanding Far Cry 5, Hitman 2, Metro Exodus, and 3D slots, gaming and gambling have always been the first adopters of new tech. And this time is no exception: blockchain-based games and casinos are knocking on the door and might enter your reality faster than you think.

Luckily, you have every chance to be the first to reap the rewards of blockchain as long as you know how to use it to your advantage. Without further ado, let’s dive into blockchain-based casinos and games along with Aleksandra Maj, an inveterate gamer and a gambling expert from KasynoHEX.

Provably Fair Casinos

You might be surprised, but some new casinos online do allow users to verify the fairness of rolls. These casinos take advantage of a provably fair algorithm, which is based on a blockchain and is made in such a way that players can check the integrity of the previously played games. The algorithm can also be used in giveaways, contests, stock & crypto trading, and digital treasure hunts, but we’ll skip it all in favor of provably fair gambling.

To understand how it works, you have to get acquainted with the following components:

  • Server Seed – the one generated by the casino.
  • User Seer – the one generated by the user.
  • Seed Pair – a combination of the Server Seed and the User Seed.
  • Cryptographic Nonce – the number of bet (Nonce#1, Nonce#2, etc.).
  • Public hash – a string of characters identifying a Server Seed or a User Seed without revealing its private key.

Now it’s still confusing, but let’s take a look at how Provably Fair casinos operate in reality:

  1. First, you generate a User Seed, which is random and known only to you. The casino has nothing to do with it.
  2. Then a unique Seed Pair is created using your User Seed and a Server Seed (generated by the casino).
  3. You are free to set a new User Seed whenever you want, thereby creating a new Seed Pair. When this happens, the casino sends you the private key of the previously used Server Seed so that you could verify the fairness of the games played.

Provably Fair casinos are now actively developing and battling the very few shortcomings they have – for the most part, the potential vulnerability of the private key as a single point of failure – so it might be reasonable to forecast a soon advent of a new era of mathematically fair casinos. What’s more, even renowned brands such as Vulkan Vegas, Energy Casino, and Slottica are actively researching the possibilities of blockchain.

Blockchain-Based Games

Game developers are finally waking up to the potential of crypto and blockchain. More and more companies accept crypto payments, but blockchain games are still somewhere in the shadows of crypto trading – except for CryptoKitties, a game released in 2017 to become the first globally adopted blockchain-based game and break all imaginable records, including a preposterous $170,000 for a rare kitty.

At the time of writing, there are about a dozen of anticipated blockchain-based games, but more often than not, it doesn’t go beyond integrating crypto as a payment method. So could it be that not a single blockchain-based game would ever surpass CryptoKitties in popularity? Well, that’s not impossible by definition, but very improbable considering in how many ways blockchain can be used in gaming:

  • Creation of games. With a classic model of recruitment in play, it’s almost impossible for young talents to get a job in a decent game developing company, but that’s no longer the priority if you have access to the code of the game, which blockchain enables. You can take advantage of the open-source code all you want, either for improving the game or creating a new one. Likewise, game developers can be driven by the consensus of the community, implementing the changes voted on by the game users.
  • Personal marketplaces. Not only does blockchain simplify purchasing and selling, but it also makes you the true owner of your assets. Moreover, the scarcity of this or that item is now provable, which promotes the growth of scarce assets in price. Besides, you can now be sure that the rare shield or sword you were lucky to get wouldn’t be printed in bulk or given away for free to other gamers by the developer.
  • Interoperability. Blockchain makes it possible to use the same address for all your accounts, enjoying interoperability at its best. On the other hand, you can stick to the ‘one address for one account’ plan.

On the dark side, though, most corporations aren’t supporting blockchain-based games since it threatens their business. They want to control their products, not just feed the code to the public so that anyone could take it, upgrade it, and use it to one’s benefit. As of now, most attempts to modify games fall flat as companies send cease-and-desist letters that effectively halt the whole shebang. However, as the new paradigm has already been presented to the public, it’s only a question of time when we’re going to see truly decentralized, consensus-based, and modifiable blockchain-based games.