The opportunities offered by blockchain and cryptocurrencies are currently being explored by a number of different industries. The key features of blockchain and digital currencies have the potential to transform various sectors: from healthcare to real estate. One particular industry that has been developing a lot of use cases of cryptocurrencies recently is the online gaming and casino sectors.
In this article, we take a look at the use-cases of blockchain-enabled cryptocurrencies like bitcoin in the online gaming industry.
An Overview of Online Gaming Industry
The world of online gaming has exploded in terms of audience size, growth, revenue, and participation. According to the research, the online games segment stood at $151 billion in 2019. This is projected to have risen to $257 billion by 2025 with an increase of 9.17% CAGR from 2020 to 2025. By this estimation, it is one of the fastest-growing industries.
Moreover, the industry is gaining huge traction from gamers across the globe. According to this study, players will have spent approximately $4.5 billion on immersive gaming experience by 2025. The same study also projects an increase of CAGR 12% in this industry during the 2020-2025 period.
This has enabled cryptocurrencies like bitcoin to boost their infrastructure. Some features of using crypto assets have proved to hold a multitude of benefits for players and online-gamers. Additionally, decentralized applications based on blockchain technology also add value to the gaming market.
Advantages of Cryptocurrencies in Online Casinos
Digital currencies and dApp casinos provide various benefits to the players that are not available under the current gaming infrastructure. Moreover, they enable game developers to leverage different tools to facilitate a fair and open gaming environment.
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Listed below are the advantages of blockchain and cryptocurrencies in the online gaming and casino industry.
Online gaming falls under a grey area of regulations in many countries. Furthermore, even in countries where online gambling is legalized, financial institutions like banks may not support transactions to and from such platforms.
Crypto assets are not restricted to such intermediaries like banks. dApp casinos facilitate transactions on the platform with tokens and coins like bitcoin. The transactions also provide a certain degree of anonymity to its users, and gamers can freely engage themselves. Hence, a dApp casino integrating crypto transactions does not need government approvals and/ or intermediaries.
With gaming platform empowered through decentralized blockchain networks, a player does not need to undergo identification procedures of KYC and AML. Certain dApp casinos allow players to engage without any privacy procedures.
3. Payouts and withdrawals
Under the current infrastructure, payouts and withdrawals may take days or even weeks. Additionally, players are also charged high transaction fees.
In contrast, blockchain games facilitate instant payouts directly into a gamer’s crypto wallet. With blockchain gaming, players need not wait for days for that to happen. The amount is credited to their crypto wallets almost instantly (curtesy of cryptopayment gateways, like NOWPayments).
The current environment of gaming with transaction options of credit cards and debit cards is insecure. There are loopholes in the security protocols which result in players losing their money when transacting on gaming platforms.
Virtual currencies based on blockchain network are secured through cryptography. Hence, these transactions are relatively much more secure than the traditional infrastructure. Players need not enter any private financial information like credit cards details.
5. Minimal fees
In the current gaming business model, developers of the game charge high fees for withdrawing money. Also, there is a charge levied by banking institutions. Since crypto transactions are peer-to-peer, there are no middlemen, and charges are not limited to geographical locations. In dApps, players can request withdrawals with zero or negligible transaction fees.
dApp Casinos on Blockchain
In contrast to normal casinos, dApp casinos on blockchain technology facilitate a fair gaming experience by leveraging a number of instruments.
Here are three distinctions that separate blockchain gaming platforms from traditional casinos and online gaming networks.
1. Provably Fair
The present structure of online gambling is vague and lacks innovation. Players have to rely upon developers for results. There is no mechanism through which results in a game can be vetted.
The provably fair algorithm is a tool that enables transparency through its innovation. It can only be implemented in blockchain games. Provably fair provides a mechanism to vet the outcomes and results of a game. Through cryptographic hash and seeds, a player can check the results of the game, thus not being dependent on a third party.
This further promotes transparency in blockchain games.
2. Smart Contracts
Smart contracts are an integral part of blockchain innovation. In a centralized online casino, operations and control over user’s funds are managed by a centralized service provider. Players need to trust that the centralized game operator will conduct operations in an ethical manner.
But with dApp casinos, the control over user funds is managed through smart contracts. All the operations are pre-defined and automated through a smart contract infrastructure. All transactions are also processed through the smart contract tool in a dApp casino.
3. House Edge
In land-based casinos and online gambling casinos, the operators normally have an upper hand. The casino always has an edge in winning games, and it is not negligible. A gamer also needs to hand a percentage of the profits to these casinos as house edge. Furthermore, the house edge percentage is not specified and operations are not transparent in traditional casinos.
But with dApps on blockchain, the house edge is clearly specified. In these casinos, the percentage of house edge is also relatively low in comparison.
The popularity of virtual currencies and technological innovation in the gaming industry has escalated in the last three years. There are two different models that have emerged. Firstly, existing platforms have started implementing crypto assets. Also, new dApp casinos are being built that work on the decentralized structure.
Furthermore, even the number of games offered on such platforms has increased. dApp casinos started with few game items but now different games from esports to in-game purchases are offered on these platforms.
- dApp dice games: A blockchain game, it basically involves drawing a random number when throwing dice with the bet that it is above or below a selected number.
- Crash games- In this game, a bitcoin curve increases gradually and suddenly crashes. The trick is to click before the curve crashes.
- Blackjack- A prominent game in the industry, dApp casinos have also now started to offer blackjack on their platforms. It is a multiplayer game and can be played with others or with the operator.
- Roulette- Similar to jackpot games, it involves a player spinning the jackpot wheel. In case you are lucky, the wheel points to the precise icon and you win a jackpot.
- eSports- Esports games, one of the rising niche in online gambling, involves video games based on different sports.
One of the first blockchain game applications was Cryptokitties. It involved transactions made on Ethereum platform. Another example, where digital currencies have come into play is Fortnite, one of the most popular gaming application. In-game purchases can be made through digital currency. FunFair is a blockchain-powered casino that combines Ethereum protocol and allows players to play right from their crypto wallets. Simpledice is a Bitcoin dice game that incorporate virtual currencies and tools like provably fair for a fair gaming experience.
Mobile Usage in Online Gaming
The increasing use of cell phones has created the need to fit everything in a pocket size. How can online games be left behind?
It is undeniable that virtual gamblers would much prefer playing such games on-the-go. This has created a number of providers that offer their services on mobile phones as well. Hence, most operators have started providing the functionality of playing bitcoin mobile games on their android or iPhone or even iPad. Service providers have made their platforms compatible with mobile web browsers in order to make it accessible to a wider number of players.
Most online casinos are made accessible for the commonly used android and iPhone devices.
The popularity of crypto like Bitcoin and Ethereum in the gaming industry is growing. They offer significant advantages in comparison to traditional casinos. This includes higher privacy and anonymity that can be enjoyed by users, as crypto transactions do not involve sharing of any personal information.
Moreover, dApp casinos do not have any limits pertaining to time or location. Unlike traditional gaming sector, the transactions with virtual currencies are safe as players do not provide details like your bank account. Due to such benefits, the popularity of crypto and blockchain technology in the gaming sector is growing.
In the upcoming years, there will be various gaming platforms based on this innovation. Overall, it is likely to change the entire landscape of this sector.