Blockchain technology was originally conceptualized sometime around 1991, but implemented when the first cryptocurrency was launched around 2008-2009. However, blockchain can exist separately from cryptocurrency, as its main feature is to be a tamper-proof digital ledger.
Today, itās reshaping the online betting and sportsbooks industry by offering smart contract payouts, instant transactions, provable fairness, and more.
Cryptocurrency Wagers
Instead of relying exclusively on traditional payment methods such as bank transfers or payment cards, some online betting platforms use blockchain as the backbone for betting with digital assets, including Bitcoin, Ethereum, and stablecoins, as mentioned in https://igamingfuture.com/stake/.
Using digital assets to bet, with blockchain facilitating the transaction, means completing deposits and withdrawals within seconds to minutes, with very low fees.
Provably Fair Features
Whether an outcome is provably fair or not remains one of the biggest problems in online betting. Luckily, blockchain can provide immutable tracking and mathematical verification.
With immutable tracking, every wager and payout is permanently written in the public ledger and canāt be changed. And with provably fair cryptographic algorithms, bettors can inspect the hash details of every game outcome. They can easily verify that the result or live line update was truly random.
Smart Contracts and Blockchain Oracles
Another big pain point for bettors is the threat that the bookmaker will refuse a payout, delay verification, or freeze their accounts after a win. This is where blockchain and smart contracts come in to solve the issue.
Since blockchain supports smart contracts, which are self-executing digital agreements, it can automate payouts. When a player locks in the bet, their funds get to escrow automatically via the code and remain out of reach of the operator.
Then, thereās the blockchain oracle, which pulls real-time, tamper-proof sports data off-chain and feeds it straight into the smart contract. Once the oracle confirms the data, the code executes the payout, and thereās no human verification required.
Peer-to-Peer (P2P) Betting
This option could be one of the most interesting changes in the industry so far, especially when it comes to decentralized prediction markets and betting networks. Platforms built on app-chains remove the house from the betting angle completely.
So instead of betting against a corporate bookie, players use decentralized exchanges to wager directly against other sports fans, making it P2P betting. They can also act as the bookmaker, with their own odds, while other peer network nodes fill the other side of the contract.
Privacy and Compliance
Traditional offshore and onshore gambling sites are prime targets for cyber criminals due to the high volume of sensitive personal and financial data stored on centralized servers. This is another area where blockchain can be useful.
Players can use a crypto address, which is not connected to any real identification information, to secure their private data from exposure.
Then, thereās a compliance aspect, where regulations require that operators maintain control over regional compliance and identity/age verification. And platforms that use blockchain utilize zero-knowledge proofs.
These tools mathematically prove that a user is over a certain age and located within a permissible territory without ever revealing their name, address, or other details to the operator.
Conclusion
With this in mind, itās safe to say that blockchain is helping improve the system of online sports betting. It can be used to speed up payments, offer provably fair gaming, and automate peer-to-peer betting.
Eventually, once this technology gets more mass adoption, the traditional friction points of sports betting will almost disappear, allowing for an open, immutable, global betting system to take over.
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