Blockchain technology has already impacted many industries and has been widely forecast to make major inroads into other sectors over the next few years.
Although it is most commonly linked to cryptocurrencies, blockchain technology can be used in dozens of other innovative ways.
We take a closer look at how blockchain works and assess the impact it could have on the online casino industry and traditional casinos in the future.
An introduction to blockchain
In simple terms, blockchain technology is a decentralised digital record of transactions that take place using digital assets.
It is a database designed to store encrypted blocks of data which are chained together to form a single chronological register of transactions.
Blockchain records information in a way that makes it impossible for people to manipulate the system, thus giving it a security advantage over other alternative types of technology.
Each block in the chain contains a number of transactions. Each time a new transaction occurs, a record is added to every user’s ledger.
If one block is changed, it immediately becomes apparent to everyone that it has been tampered with. This makes it impossible for hackers to interfere with the data.
Blockchain & casinos
As mentioned earlier, blockchain technology is often linked to cryptocurrencies, and this is undoubtedly the main way it could impact the casino industry.
It is fair to say that there is still widespread scepticism about cryptocurrencies, with many people struggling to understand exactly how they work.
However, several online casinos already facilitate cryptocurrency payments and experts believe that more will jump on the bandwagon over the coming years.
There are several benefits to the gambling industry in fully adopting blockchain and cryptocurrency including enhanced security, anonymity and cost-efficiency to casino operators.
From a security perspective, blockchain technology provides an additional layer of protection for users as all transaction data is stored in a decentralised ledger.
Blockchain provides greater data privacy for users – Image via Pexels
This not only prevents the illegal trading of digital assets, but also significantly lowers the risk of payment duplication and the threat from hackers.
Anonymity and privacy are another key benefit of blockchain, particularly where land-based and online casinos are concerned.
Many casino players are wary about disclosing personal information to casinos, as they worry about where data will be stored and how it may be used.
Blockchain removes this concern from the equation, with user information protected to the extent that personal data cannot be compromised.
Blockchain also offers potential cost savings to casino operators, allowing them to offer a far more streamlined registration process to users.
By removing the need to collect personal information, players will be able to access the games simply by providing a username, email address and their cryptocurrency deposit.
The casino’s operating costs are significantly reduced in this scenario, as they do not need to pay to use the services of digital payment companies to facilitate deposits and withdrawals.
Many of the popular cryptocurrencies such as Bitcoin have no hidden transaction fees, thus benefiting both the player and the casino.
Blockchain also removes the risk that a player may renege on payments, as the blockchain immediately verifies each transaction as it is made.
Other benefits of blockchain
Another key benefit of blockchain technology is its fully transparent nature – users can see how transactions are processed and where their money goes.
This gives players peace of mind that the casino they are playing at is fair and they are not going to be scammed out of their money.
Scam websites were a major issue when online casinos first launched, with unscrupulous operators taking advantage of sketchy security in the digital payments sector.
Blockchain allows users to keep track of their funds, thus removing the possibility that casino players will be swindled by rogue casinos.
Blockchain provides greater transparency for digital transactions – Image via Pexels
One grey area where blockchain is concerned relates to licensing and regulation, with the anonymous nature of the system arguably open to abuse.
Online casinos are often restricted to the jurisdictions in which they can operate, but blockchain potentially allows for users to circumnavigate those rules.
As transactions between the player and the casino happen on the blockchain, these are not governed by the same laws as other traditional payment methods.
However, most casino players will view this as beneficial, as it opens up the possibility of playing on any site globally rather than restricting their activity.
Perhaps the biggest benefit to casino players from blockchain is how quickly their payment transactions are processed.
While most casinos process deposits immediately, they are often not as quick to pay out winnings when a withdrawal request is submitted.
Blockchain provides the perfect solution by removing the need to wait for external third-party involvement in any transactions.
Future implementation of blockchain in casinos
At this moment in time, casinos are only scratching the surface of blockchain technology, with cryptocurrencies the main way it has been adopted.
As cryptocurrency use becomes more widespread, an increasing number of operators will be forced to incorporate it into their offering.
This will apply to both land-based and online casinos, thus making it easier for players to play games such as blackjack, roulette and slots.
Wider user of blockchain technology is certain to follow, with record keeping for other casino transactions amongst the ways this could manifest itself.
While there are several technical and regulatory challenges to overcome, blockchain is likely to become far more prevalent in the casino industry over the next decade.
This will probably result in cryptocurrency payments becoming a standard option in brick-and-mortar casino businesses.
The online casino sector is already heading down this path, and it would be no surprise to see blockchain become the ‘go-to’ technology for operators by 2030.
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