Here’s how the same technology that powers Bitcoin is changing online sports betting
The earliest occurrences of gambling date back to the Paleolithic period, with the first set of dice being traced back to Mesopotamia in 2300 BC. Since then and through to contemporary times, betting has been a large part of our society — a mixture of bursts of joy when beating impossible odds and bitter sadness as victory slips away when you’re having bad luck.
Everything that can have different outcomes can be the target of a bet. Sports have had a tradition of betting on the outcomes of matches, making the competition inside the courts and arenas also extend to the audience, building extra excitement around the events.
Many companies have built solid businesses around betting and, while some transactions and bets are uneventful, stories of fraud and scams still exist. Gamblers, especially online gamblers, have to be careful with the companies they bet with.
That’s where we come in and help you find the best online betting platforms.
But, sometimes, bets turn out bad and the problems in the betting software systems are to blame. In September 2019 in the United States, a man laid down a $110 bet on an NFL game. After he won the bet, the bookmaker FanDuel refused to pay the $82,000 prize, claiming that “the automated system mistakenly generated the odds”.
After the incident got negative media coverage, the amount ended up being paid in full. But not all these issues become public and, in some cases, bettors may end up being at a disadvantage against bookmakers.
However, a new technological advancement might be the answer to some of these problems. Commonly known for supporting cryptocurrencies such as Bitcoin and Ethereum, Blockchain technology has multiple applications across industries and the sports betting industry is one of them. The advantages seem to both benefit bookmakers and bettors alike, with new services being created to accommodate the potential demand for this new way of placing bets.
The Bitcoin whitepaper, published in October 2008 by Satoshi Nakamoto, originally hailed a model of a peer-to-peer electronic cash system. The blockchain was created and developed over the years based on this paper and was largely a low-profile endeavor until 2017, when Bitcoin prices skyrocketed, leading to a worldwide craze that made instant millionaires overnight. The high volatility of the currency also dictated that these victories would be short-lived, with a major crash happening in 2018.
Independently of these facts, the technology behind blockchain (the infrastructure that makes Bitcoin transactions possible) has many applications, and many more are still being explored. In order to fully understand how blockchain can impact the sports betting industry, we’ll start with a general outline of how blockchain works.
What is the blockchain?
Defined as a “distributed, decentralized, public ledger”, blockchain allows for greater transparency, security, and reduced transaction fees when applied to sports betting. The concept can seem very complicated at first, so let’s take it step-by-step:
- Think of this “ledger” as having multiple pages (or blocks). Each of these pages holds transactions, or bets, that each bettor is betting in different events around the world;
- As you place a bet on a football match, for instance, your intention is registered in a block and made public in this transaction ledger;
- You are now in business;
- This agreement and thousands of others are added to a new block. Each block has a unique code, generated according to the principles of cryptography, that ensures these blocks will not be altered in any way, by anyone;
- This ledger is public and accessible to everyone, in the interest of accountability; but don’t worry, your personal information isn’t compromised, only your bets are displayed;
- Since setting the bet is done securely using a network of computers belonging to many different parties, the processing isn’t done solely in the bookmaker’s internal network. It is done transparently.
The advantages of the sports betting blockchain
But why is this technology suitable for sports betting? Here’s why:
Since all transactions are public in the ledger, it is easier to keep track of bets and prevent them from being mishandled in internal networks run by bookmakers. This basically means that everyone agrees to what all of the numbers are so no one can change them for their own personal gain.
Transparency leads to accountability. All bets are processed correctly and quickly, and payouts will not be affected by archaic systems and their inherent limitations, or dodgy rules hidden away in terms of service that users seldom read.
Closely related to what we said above, the bets won’t be handled by a central bookmaker’s software. By relying on smart contracts (a bit of code that ensures that the conditions set by you and the bookmaker are followed) there is no need to run the bet through an internal network. Everything is done within the blockchain, which also reduces the individual load of the bookmaker’s systems.
The principles of cryptography and algorithms that enforce security on each step of the process allow you to rest at ease, knowing that your bet was accepted and that the conditions will not be suddenly voided in the middle of the process. Also, in areas where gambling is restricted or prohibited, bettors turn to illegal bookmakers, usually with devastating results. By setting everything through the blockchain, these risks are avoided.
The betting industry relies on expert advice to guide betting trends and strategies, usually representing extra costs for bookmakers and bettors alike. Since everyone is rewarded for contributing with information to the blockchain, and all the transactions are public, new algorithms can be created to process the data and identify new betting information, allowing people to copy bets or bookmakers to develop new products, for instance.
Powered by cryptocurrency
Besides providing extra anonymity (and discarding the need for lengthy identity checks at bookmaker shops), cryptocurrencies also offer lower payment processing costs and allow you to easily bet across borders in international sports leagues and tournaments without the hassle of different currencies and conditions. There are many kinds of cryptocurrencies out there, with different sets of rules, advantages, and opportunities.
Better access to your funds
In particularly busy weekends or during tournaments, where many events are taking place at the same time or within short periods of one another, having access to your funds is key. Currently, bookmakers might take some time before making your money available again.
In this new system with cryptocurrency, you can withdraw your winnings faster and reinvest them quicker, which not only makes it more convenient for the bettor but also less costly for the bookmaker in administrative terms.
The industry wins (too)
This won’t bring benefits to the bettors only, as most of the heavy lifting work that bookmakers do today is going to be handled by the blockchain in terms of processing and security.
As a result, new players in this industry that wish to build a betting business will have better opportunities to enter the market, and existing companies will be able to invest more funds in promotions and improved user experience for the customers.
This is not limited to national betting companies. As the internet has no borders, the international betting market has an opportunity to flourish and become more attractive, and companies will start competing to offer the best experience to their customers, increasing the value of the service provided.
The speed and reliability of the blockchain, coupled with reduced costs, could make the betting industry grow dramatically in the coming years, also considering the boom of new betting realms such as esports.
It might seem like a lot of information, but the benefits of switching to this new infrastructure will make investing your time worth it in the long run, as it will provide a better betting experience and more freedom to place bets where and when you want to.
Many things have happened since 2300 BC. Gods, wars, major social changes – the thrill of betting survived them all, and nothing will stop the fun of gambling as we move towards the future. What our ancestors didn’t imagine was how much better things would get in this realm with all the betting categories that were invented and the ease that the internet would introduce to the process.
The full range of applications of blockchain technology and cryptocurrencies might still not be fully researched, but, as far as sports betting is concerned, it seems that despite the odds, both bookmakers and bettors stand to win in the long term.
Sports Betting with Blockchain FAQ
Do I have to use Bitcoin when using blockchain?No. Think of Blockchain as a database. Bitcoin uses blockchain technology as a database, but it could also use any other kind of database. Some of the websites we mention may accept Bitcoin, but you usually don’t have to use it.
Will using blockchain change the way I make sports betting online?You don’t have to do anything differently if your bookmaker uses blockchain. It’s all “under the hood” and something you don’t have to worry about?
Will all sports betting be done with blockchain in the future?Blockchain technology is exciting and computer science professionals have long debates (and even scientific research papers) arguing for or against using blockchain. Unless you own a betting system of your own, you really don’t need to know about all the technical things behind blockchain. Just go out and have fun!