In a recent report from CoinStaker, the popularity of cryptocurrency-based gambling platforms has risen in the last several years due to relatively low commissions, high levels of security, and the ability to make unlimited withdrawals. Now, Bitcoin gambling machines have made their first appearance in the physical world with the “hardware realization of [a] classical European roulette table” designed by SmartPlay.tech.
The roulette table, which is currently in its testing phase, is the first incarnation in a series of so-called ‘SmartBox’ machines that will support a variety of games, including slots, poker, bingo, and blackjack. Each machine is equipped with a touchscreen, a QR scanner for transacting with crypto wallets, and a port for depositing fiat money.
During the testing phase, SmartBox games will not allow users to use real cryptocurrency on the machines. Instead, the beta version supports the use of fake tokens. After the SmartBox platform is fully launched, however, users will be able to make bets with real ETH tokens and the Smartplay.tech network’s native tokens (RLT). Payout will be made in both ETH and RLT.
“Every Player is a Partner”
When fully launched, the SmartBox machines will run on their own blockchain on the Ethereum Main network; SmartBox tokens are called ‘Roulette Tokens’ (ticker symbol RLT). The machines’ use of smart contracts has the potential to reduce the amount of staff members needed on deck for a real-world casino to function properly.
SmartBox machines and the RLT network have been designed so that each player is automatically credited with 0.5-3% of each bet that they place in the form of RLT tokens. According to SmartPlay.tech’s website, this allows players to “[receive] a share of the profit composed of all other players’ future bets.”
The decision to hand out RLT tokens to each player was made to incentivize greater usage of SmartBoxes and the Smartplay.tech network. According to the Smartplay.tech whitepaper, “at the same time players receive instant guaranteed bonuses in RLT tokens backed up by ETH cryptocurrency at the current rate and automatically become the game platform’s co-owners.” Thus, “every player is a partner”, per the project’s tagline.
Transaction commissions have been kept low, and have been optimized to ensure that casino profits will always be higher than fees charged by the network. Additionally, the house edge over the player has been set at 2.7% “no matter how perfect the player’s game is and what strategies are used.”
The RLT ICO finished in April of 2017, and raised 2873.592 ETH (worth $126,150 at the time of ICO completion); this figure exceeded the ICO’s goal of $100,000 by more than 25%. Since the end of the ICO, it seems that Smartplay.tech has managed to stay on track with the goals laid out in its roadmap.
The names and faces behind Smartplay.tech have not been made public. However, a note in the project’s whitepaper explains this with the fact that “in the country of developers team the legal status of cryptocurrency is still questionable and casinos cannot operate outside the allowed zone.”
The note continues to say that the identities of the individuals involved in the development of the project will be revealed after the necessary legal matters have been sorted out.
Crypto in Gambling: A History in Brief
While gambling platforms built on the Ethereum network have continued to rise in popularity, Bitcoin is the ‘OG’ when it comes to crypto gambling. According to Gambling Insider, Bitcoin-based gambling platforms first appeared as independently developed games crafted by crypto enthusiasts, often with poor graphics–some were entirely text-based and had no graphics at all.
However, as these games became more popular, Bitcoin gambling platforms that matched the rest of the online gambling industry began to emerge in 2013. Gambling Insider reports that the first game to achieve any sort of legitimate notoriety was a simple dice game with a low commission; in 2013, some small online gambling firms began publicly releasing some “classic casino games” as well as some online Bitcoin slot machines.
Nowadays, 60 of the world’s most active Bitcoin wallets belong to Bitcoin gambling platforms. According to TheBitcoinStrip, gambling-related transactions make up roughly 60% of transactions on the Bitcoin network–about 337 transactions per second.
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Who uses crypto gambling platforms? Gambling Insider has divided participants into two basic categories. The first is “those who have Bitcoin”–presumably a lot of it–and “want to gamble.” Despite the assumed deepness of their pockets, however, the average amount deposited per bet is smaller than the online gambling industry average. The difference is in stamina–player lifetimes are “surprisingly longer.”
The second kind of Bitcoin gambler is who many would consider to be the “average Bitcoin hodler;” a person who engages with the Bitcoin network as if it were like any other online means-of-payment. GI explains that “these players exhibit exactly the behavior they would at a traditional online casino; identical player lifetimes and values.”
Why So Popular?
Coinstake reported that Bitcoin casinos became a popular alternative to traditional online casinos because of their relatively low commissions, better security, and their support of unlimited withdrawals.
Additionally, the transparency inherent to blockchain technology makes crypto networks particularly well-suited for gambling purposes. The presence of a blockchain network means that players do not have to place their trust in a centralized, third-party entity to ensure that the transactions that are taking place throughout the course of a gaming session are legitimate.
The automatic execution of smart contracts on the Ethereum network makes the practice of crypto gambling even more secure and trustless; payouts happen automatically and with complete transparency.
Despite the security advantages that a blockchain network offers, however, there are still some vulnerabilities present with blockchain-based gambling. DDoS (Distributed Denial of Service) attacks have been a serious issue in the world of cryptocurrency, often causing problems for some of the world’s largest crypto exchanges–the crypto gambling industry is no exception.
DDoS attacks happen when a website is spammed with hundreds or even thousands of requests, causing the site to temporarily crash. Attackers may ask for a ransom before they will stop the attack, or may just wish to direct users to a competitor website.
In early December, Casinopedia reported that 74% of Bitcoin gambling websites experienced a DDoS attack in Q3 of 2017. The online gambling industry as a whole accounted for 34.5% of worldwide DDoS attacks.
Additionally, the continued scalability problems on some blockchain networks (most notably Bitcoin) can hinder blockchain-based gambling enterprises. For example, transactions on the Bitcoin network can take hours to complete and garner enormous fees during periods of high network traffic.
While scalability is not quite so serious a problem on the Ethereum network, Smartplay.tech has anticipated scalability issues by designing the network so that payouts with occur only after 50 ETH’s worth of winnings have accrued on the network as a whole.
The Future of Crypto in Gambling
As cryptocurrency continues to become increasingly popular in the world’s technological and pop-cultural spheres, real-world usage blockchain-based networks is also becoming more popular. The crypto gaming and gambling industry as a whole appears to be growing–in addition to the appearance of the SmartBox, the Ethereum network has become the host of a myriad of games (let’s not forget the CryptoKitties.)
After all, there are some serious advantages for players as well as hosts when it comes to blockchain. Gambling Insider reported that Bitcoin casinos scored higher on several metrics when compared to traditional fiat gambling platforms: “Average number of games available was eight percent higher in Bitcoin casinos and average withdrawal times were more than seventy percent faster!”
Indeed, the integration of cryptocurrency networks are a rather innovative way to easily alleviate some “historical pain points” in the online gambling industry. At the same time, however, blockchain integration with certain popular crypto networks present their own set of issues (such as scalability problems and DDoS attacks).
In any case, the popularity of crypto is becoming increasingly difficult to ignore, regardless of the industry one may be involved with. Companies like Smartplay.tech may just be on the edge of the perfect moment to revolutionize the gambling industry, or at least make a serious splash.