What is Blockchain Gambling?
Blockchain Gambling you ask? Well…where to start?
The Ethereum blockchain is just a big, decentralised, public database.
All blockchains are just databases really. They aren’t so mysterious.
Somebody always controls a database. This control is the power to change things.
But with the Ethereum blockchain there is no single person (or group) in charge.
So changes to the database can only be done via consensus (consent). A majority of the participants in the network must agree.
This makes the Ethereum blockchain database decentralised.
The Ethereum blockchain is much more trustworthy than a centralised database. Because it is very difficult (if not impossible) to change.
All gambling games are built on some database.
There are 2 types of gambling games:
- Non-Blockchain (Central Database) Gambling.
- Blockchain Gambling (Decentralised).
Non-Blockchain (Centralised) Gambling
This is your standard type of gambling game.
It works the same as an exchange service actually.
You send your ETH to the game owners. They record your ETH balance in their own database. You see it as some numbers in your own account.
Now you’re at their mercy!
The updates to your betting stats. (wins, losses, etc) are done centrally, by the game owners.
This is faster than a blockchain database. But there is a trade-off.
You have to trust the people who run the game.
Once you send ETH to the game you can only get it back if they give it to you. A withdrawal is actually a request for your own money.
Let’s hope these centralised operators have enough funds and don’t run away. :
So there is a trade-off here. You get a faster database. But you risk losing your money. It’s a big risk!
Also, a centralised database is not public, like the blockchain. So you have to trust that the site owners are not playing games with their database, to rip you off. Another risk!
Blockchain Gambling (Decentralised)
There are no accounts. You never send your funds to any 3rd parties. There is no internal database guarded by some anonymous site owners.
Instead, you play directly from your own (local), personal, Ethereum wallet.
There is no trust involved. You always control your funds!
You send funds directly to a Smart Contract, on the Ethereum blockchain.
The Smart Contract processes the bet and returns the win directly to your wallet.
You only have to trust the Smart Contract. This is public, verified code, that lives on the very public Ethereum blockchain.
Now, for this kind of awesome approach there is a trade-off. Bets are processed slower than with a centralised database.