Bitcoin started out as a gambling instrument.
Just one year after the launch the first ever blockchain-based network, a software developer created a reward website called ‘The Bitcoin Faucet’.
‘The Bitcoin Faucet’ incentivized users to play small games or perform easy tasks. Like in a traditional lottery system, at a predetermined date and time, it would reward a few lucky users some bitcoins. It originally gave out 5 BTC per person which, at that time, were basically nothing in real money, not even cents.
Soon enough, more and more early adopters copied Gavin Anderson’s model and build their own faucets to introduce newbies to Bitcoin and help them understand the underlying technology, the blockchain.
The creation of new cryptocurrencies led to even more faucets, in the attempt to promote digital currencies to more and more users.
In fact, it’s no wonder today, cryptocurrencies like Ethereum, EOS, or Tron revolve around gambling apps. Sure, these apps can’t quite compare with the original faucets, but it’s the same basic model: introduce newbies to new technologies by simply having fun.
Why did (and still do) developers choose gambling, though? Because the blockchain and gambling go hand in hand. At some point, it’s fairly possible crypto will take the gambling industry to a whole new level.
How? Well, you’re about to find out.
Firstly, we all know the gambling legislation varies from country to country. There are many parts of the world where online gambling is banned entirely. There are other regions where the industry is unregulated, so it operates in a gray area, leaving the user confused and fearful.
Bitcoin and all the other cryptocurrencies don’t actually care of legislation. Since it’s 100% digital cash, you don’t have to go through a bank to deposit funds and have a little bit of fun gambling.
Surely, when you buy cryptocurrencies, you may be asked for personal information, but once you get out of the exchange, you can use your crypto freely, without anybody enforcing you to avoid certain websites. You can use privacy-centered altcoins like Monero or ZCash, or you can even use Bitcoin with a mixer or tumbler, for extra privacy.
Faucets were widely used by Americans, back in the 2010s, in spite of the Unlawful Internet Gambling Enforcement Act of 2006 which effectively bans online casinos in most of the US states.
Moreover, in today’s environment, many Chinese gamble on various blockchains like Ethereum or Tron, even though they are strictly prohibited to do so, by the state law.
Why would an American or Chinese risk to gamble on unregulated platforms that could easily play unfair? There have been cases of shady gambling companies, conducting their business unfairly, that just scam-exited with their clients’ money.
By using the blockchain though, such practices are 100% avoidable. Why? Given the nature of the technology, the blockchain is a trustless environment, where you don’t need to trust anybody. You just need to trust the hard code, the underlying technology.
Let’s take the RNG, as a practical use case. The online casino games are based on the Random Generator Number algorithm. Since the invention of casino slots, many players have accused casino operators of playing unfair and rigging the games.
With the blockchain, the players can now verify the validity of any casino game’s RNG. The technology can now help any gaming operator switch from an opaque business to almost total transparency. The users can check the smart contract (if it’s a blockchain like Ethereum) – the code that makes the RNG work the way live casino games usually work – and see for themselves if a game is fair or not.
That’s not all. In a truly 100% permission-less blockchain environment, no online casino operator can scam-exit and steal its client’s money.
In other words, the common expression you often hear in the crypto-sphere ‘Be your own bank’ can apply to any gaming app.
With the blockchain, the way we think about a casino account will become obsolete. We won’t deposit OUR money from a personal account to the casino account. Instead, we will create a wallet or even link an already-owned wallet with the game we want to play and simply… play. Our private keys will remain our own; therefore, we will have 100% control of our funds.
To gamble, we will just have to send the wager to a smart contract address – again verifiable through the blockchain – let the smart contract execute – spin the roulette, deal the cards, etc. – and receive our prize if we get lucky… in our own, private wallet.
The casino will only take its fair share in rake, at the end of the smart contract execution, without ever touching a client’s real money account. No private keys, no actual cryptocurrency to steal from.
There are many benefits of using the Bitcoin in gambling today. But, doesn’t the future look even brighter?