Bitcoin and its blockchain technology has been around since 2009, but only recently has it reached the mainstream with various businesses from hosting companies to gaming firms now accepting payment in the digital cryptocurrency.
Bitcoin or “BTC” originally gained popularity amongst libertarians and those involved in the black market sites like the Silk Road because its anonymous nature allowed it to exist outside the interference of governments and regulators.
However, in recent years, it has been its open and distributed functionality and zero transaction costs that has brought it more mainstream. The blockchain technology is now the focus of a variety of financial technology or “fintech” startups and Bitcoin is accepted as a form of payment by a wide array of business from Microsoft to AirBaltic to HonestBrew.
Benefits of Bitcoin
Some large future-looking gaming firms such as Net Entertainment (NetEnt) and BetSoft have embraced the new technology, while some new specific Bitcoin casinos have also launched specifically to take advantage of the technology.
Players at these Bitcoin gambling firms have the benefit of paying ultra-low or even zero transaction fees when players make deposits to their accounts. Moreover, payouts from these BTC gaming firms are near-instant, as the transactions are added to the blockchain and the Bitcoins transferred to the player’s wallet within a few seconds – there’s no delay in waiting for funds to clear.
As soon as the funds appear in the player’s Bitcoin wallet they are available to use anywhere that accepts the currency, and for those who want to turn their Bitcoins into fiat currency such as USD, EUR, or GBP – that is also possible through direct trades, online exchanges, or at peer-to-peer trading marketplaces. Users do have to submit identification documents to turn their Bitcoins into traditional currency, but the process has become much more streamlined in recent years with companies like Coinbase and Circle.
Some people may still feel more comfortable keeping their money at a traditional bank, but Bitcoin has offered quite consistent value growth over the last 18 months. Historically the digital currency has been very volatile, but it appears to have calmed as the technology has matured – but the risk of large price fluctuations remain.
Provably fair”?
Anonymous gaming such as available at Bitcoin casinos carry a risk of players being cheated in games setup so the house always wins. To combat this threat, a novel cryptographic technology called “provably fair” has emerged so that players can be sure the games they play are honest.
This technology was first developed by BitZino, and essentially involves the house deploying a cryptographic hash function (SHA256 algorithm) to create a fingerprint of an already shuffled deck known as the server_seed. Then, before every hand, the Javascript in the player’s browser generates a random string called the client_seed.
When the player hits the “Bet” button, their browser sends their client_seed to the house, which then creates a hash of the server_seed and client_seed together. This combined hash is used to seed the Mersenne Twister pseudorandom number generator which is used to shuffle the pack.
Knowing these hashes allows the player to check whether the game was actually a fair contest once the hands are dealt – just like the blockchain technology, Provably Fair makes use of technological innovation and encryption to create trust in the system. The two technologies may be different, but have a similar purpose and Provably Fair would probably not exist without having the blockchain for inspiration.
Photograph by Typography Images