You might wonder how crypto casinos can integrate a complex technology like blockchain into online gambling. Well, it is possible thanks to the many innovations such as smart contracts, in-house crypto wallets, asset tokenization, and more that online casinos use. Crypto casinos like MegaDice.com strive to make crypto gambling much more convenient for iGamers, and one way they do so is through the use of smart contracts.
Understanding the Basic Concept of Smart Contracts
A smart contract is a digital contract containing agreements that are stored and executed on the blockchain. It is an algorithm that automatically executes agreements once the stated conditions are met. The crypto ecosystem is a high-tech automatic space that processes millions of transactions in seconds using smart contracts.
Smart contracts also further the decentralization’s cause in the crypto space because they reduce the need for external involvement when anonymous parties transact. These digital contracts have proven very useful in different spheres within the casino space, and it is no surprise that online casinos have adopted them.
Specific Use Cases of Smart Contracts in Crypto Casinos
There is more to learn about smart contracts, but we’ll focus on their relationship with crypto gambling. Let’s look at how crypto casinos implement contracts for different uses on their platforms.
1. Automatic Payouts
Why process things manually when smart contracts can automatically reward players?
Most online casinos have to process cashouts, especially with large sums, but there will be no need for that with smart contracts. The digital agreement confirms all the necessary details before executing payment much faster than the traditional method in online casinos. Smart contracts are ideal for handling payouts.
2. Bet Placement and Verification
Playing online starts with funding your wallet and then withdrawing bits of it to play every round. Smart contracts can be employed to monitor these minor bet processes with better efficiency. Your deposits and bets are all continuously registered to the blockchain by smart contracts.
3. Game Execution and Logic
Besides paying players when they win, smart contracts can also be used to execute game logic.
The events in every casino game are defined by rules and odds, which can all be encoded in a digital contract. These contracts will determine when the game is won through randomly generated numbers (RNG) and determine what amount is to be paid out. Just as traditional games operate on open rules, you can verify game logic in the smart contracts before playing as well.
What are the Effects of Smart Contracts on Crypto Casinos?
Are there benefits or consequences of using smart contracts in crypto gambling? Well, here is a short list of answers to that question.
1. Fairness and Transparency
The alluring property about having immutability in gambling is it keeps it free and fair for every party involved.
Records of digital transactions are publicly stored and available on the blockchain, which makes online platforms more trustworthy. Smart contracts take it a step further since processes are executed independently without the need for the casino to act.
The conditions tied to smart contracts cannot be rigged, so there is no room for foul play. The best online casinos have their contracts audited and certified by independent parties to prove their services are fair.
2. Improved Security in Gambling
Security is the most essential trait an online casino should have, especially when dealing in crypto. The extensive deployment of smart contracts in casino operations drastically reduces the number of vulnerabilities a casino has to cyber-attacks. Smart contracts put more of the casino on the blockchain, which cannot be influenced as easily as traditional site operations.
However, you should note that smart contracts are only partially untouchable, as some contracts rely on oracles (external data sources). Aayushman Thapa Magar tells how randomness generation, a process in which some smart contracts depend on external factors, can be compromised.
3. Reduced Operational Costs
Gambling platforms can shelve some of their expenses by implementing digital contracts across their website. It is much cheaper to use blocks of code to manage the volume of activities happening on high-traffic websites like casinos. Smart contracts reduce the amount of resources consumed and staffing required to run a casino. The reduced operational costs may also influence casinos to reduce costs for their services, which benefits players.
4. Heavier Backlash from Errors
Immutability is a property of the blockchain itself, not a feature that comes with using smart contracts. However, every action taken by the smart contract will be immutable, so it is an effect that must be considered. Errors in code or the system can lead to wrong and irreversible decisions that may cost players or the casino. Attacks that exploit vulnerabilities in a smart contract will cause damages that are not reversible. This is why many crypto casinos invest a lot in making their systems accurate and reliable to prevent costly accidents.