The Challenges of Demonstrating Fairness in Bitcoin Gambling


As online gambling reaches more and more users, industry growth has set new standards. And while not every service is as transparent as it seems, some certainly are and they are changing both perceptions of gambling and the direction of the industry.

To the majority of the non-gambling community, the principle behind online casinos is hardly difficult to understand: brash, over-the-top publicity, the illusion of control and the old adage of ‘the house always wins.’

In the internet’s nascent years, few from the industry itself would have cause to disagree. However, Bitcoin’s arrival on the scene famously began to change fundamental traits of online gambling. Presenting a curious paradox given cryptocurrency’s innate transparency and openness, providers sought to incorporate the flexibility Bitcoin offers while still providing a an exciting yet lucrative product to users.

The result is casinos that employ Bitcoin’s fairness to appeal to a wider demographic, having removed the stigma often attached to the industry while preserving the excitement factor of the gambling process itself.

Fair’s fair

Several years into Bitcoin’s presence in online casinos, certain buzzwords have become trends in setting emerging industry standards. Specifically, the concept of ‘provably fair’ gambling, in which the bettor notionally has complete power to verify that the game being played is not subject to odds different to those which they were made aware of beforehand, is a key aspect of many cryptocurrency-based online games.

While the exact mechanism used by different providers varies, it is not always the case that casinos are fully transparent about their provably fair credentials, with some ultimately not allowing for full verification of results. This has prompted other providers, such as bitZino, to engage in marketing activities such as social media posts in which senior staff explain the provably fair implementation used by them.

“What is always a ‘red flag’ is the display of a serious lack of knowledge of crypto currencies and the systems of guaranteed ‘provably fair’ outcomes by these companies,” James Dollahan of Filipino consultants, Worldwide Summit, told Cointelegraph. He added:

“Likewise, an operator not being able to clearly or accurately explain what provable fair actually is and which algorithms are used by their programmers to ensure it works and exists.  They ignore the question or simply do not answer it […] because they cannot.”

Co-founder of Nitrogen Sports James Hampleton meanwhile told Cointelegraph that the best way of preserving the integrity of provably fair lies in education. Like Bitcoin, Hampleton says, a lack of understanding prevents the technology being openly adopted and trusted by the mainstream, non-intensive gambling community.

“You see a lot of comparisons of Bitcoin to the birth of the internet – the tech is cool, but it still requires people to build the interface so that people outside the community feel comfortable exploring what it’s capable of,” he explained. “Verifying that a hand is Provably Fair requires that players understand hashing and can run shuffling algorithms. In order for it to really take off as a standard, it requires support from the people who are not only capable of this, but are passionate about it.”

‘Demanding transparency’

Hampleton added that he considers the technology to be not just a standard but the obvious future for the industry as a whole.

“Provably Fair software is rapidly becoming an industry standard, and for good reason. It’s in your best interest to be able to see the code, and run the shuffling algorithm yourself. By accepting a ‘client seed’, Provably Fair software also gives you the same kind of control you have in a brick and mortar casino – it’s the online equivalent of cutting the deck.

“This is the future of betting online. Players should be demanding more transparency from their casinos, and Provably Fair technology not only allows this, but mandates it.”

Unlike brick and mortar options, however, Bitcoin allows for ad-hoc verification to a practically infinite degree via the provably fair protocol.

“Bitcoin is the perfect example of technology solving a problem, and it really allows us to fulfill our main goal: always put the bettor first,” Hampleton continues. “Provably Fair is another example of this; it allows us to give control back to the players.”

As for the entry-level users considering entering the market on the back of the increased transparency engendered by Bitcoin play, like Dollahan, Hampleton nonetheless had some salutary words of advice:

“Choose a casino that can help you verify your hand or roll using external software – they should be able to talk to you about what shuffling algorithms they use, and how they hash the server seed and initial shuffle.”

Igor Sokolov, CEO of True Story Media, meanwhile applauded the efforts of operators such as Nitrogen in providing additional market transparency. “Provably fair gameplay is still somewhat in a state of flux,” he explained to Cointelegraph. “Nitrogen’s implementation is a good example of something which is both realistic and positive for the community.”


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