Bitcoin SV blockchain – iGaming Use Cases
iGaming is big business. A study by Grand View Research revealed that in 2018, the annual global market size for iGaming was valued at a staggering $48.5 billion USD – a figure that is only expected to rise as the penetration of smartphones and mobile internet increases, particularly in emerging nations.
But for a sector with an enviable capital base and immense growth potential, iGaming continues to be plagued by inherent issues of fairness and trust. Concerns over the calculation of odds, protection and payment of monetary stakes, slow settlement rates and high fees, not to mention issues with data protection and digital security, embody just some of the problems hampering online casinos.
The degree to which these concerns are valid may be disputable, but the impact they have on the reputation of online casinos – and subsequently, their long-term ability to remain a going concern – is not.
Integrating iGaming with blockchain technology has the ability to solve these issues for online casinos and restore the reputation of the industry, by making transparency and verifiability a core component of their offering.
Blockchain technology enables a trustless system, building trust directly between parties without relying on the facilitation of a central authority or intermediary (such as a casino “house,” sportsbook operator, or escrow service to process bets). Every part of a given transaction made on a blockchain is logged, stored and distributed, across a network of computers, creating a permanent, immutable and transparent record that is able to be checked and verified by all parties involved in the transaction.
For online casinos, these very characteristics represent solutions to the intrinsic problems confronting the industry, yet offer only a small insight into the overall potential for blockchain technology to transform the systems which underpin iGaming. It is the Bitcoin SV blockchain that best has the scalability, stability and security advantages which will best ignite the future of iGaming.
Case Study: Betting on Blockchain - BitBoss
In an industry facing problems of trust, an innovative American business based in Denver, Colorado is utilizing the power of the Bitcoin SV blockchain to connect real-world and online casinos, while facilitating fair and verifiable iGaming.
With more than a decade spent advising, building and running gaming companies, Matt Dickson knows a thing or two about the industry – the good, the bad, the ugly. But with his newest venture, BitBoss – of which he is a co-founder and CEO – Dickson is hoping to remove the bad and the ugly which the industry is all too frequently associated with, by harnessing the power of blockchain technology.
‘We think that the BSV blockchain is ideal for eliminating a lot of these central points of failure,’ he explains.
‘What it is that we’re really trying to do is to tie the physical world – the casino world – to the online world.’
Already, BitBoss has released a portfolio of products for iGaming, which collectively work to transition all money and game actions for both real-world and online casinos onto the public BSV blockchain.
‘We’ve designed a hardware product that gets inserted into slot machines. It’s roughly $100 USD right now, so it’s very inexpensive. It runs Linux, we insert it into a slot machine, and it intercepts the communications going back and forth between the slot machine and the backend server that runs a casino,’ says Dickson.
‘There are 10 million slot machines in the world, and they all run on a common protocol. We can easily route cryptocurrencies on and off slots, mainly in the form of tokens, which is just a replacement for a casino chip or credit slip.’
The hardware solution, known as Bridge Link, allows players to seamlessly move their tokens from a slot machine to their smartphone via the BSV blockchain, with funds stored securely as a cryptocurrency.
‘Our genuine hope is that someday, a casino gambler sits down, uses our technology and has no idea that blockchain was behind it,’ says Dickson.
‘We purposely designed this product to be backend agnostic – any casino can use it. Now, all of a sudden, your customer has a crypto wallet unbeknownst to them. If they want to cash out from the slot machine, the credits are moved to their phone, which makes it very easy for the casino to offer other services using those credits.’
Dickson used bars, restaurants and gift shops as examples of how Bridge Link could be deployed in a real-world setting, but transitioning players between physical and digital gaming is where BitBoss’ innovations truly shine.
‘It’s very expensive in this day and age to get clients online, it can cost anywhere from $400-$800 per customer to attract an online client,’ explains Dickson.
‘We think that physical casinos, with all of the millions of visitors they have, are missing the boat if they’re not slowly walking their players onto the blockchain.’
Blurring the lines between real-world casinos and iGaming, BitBoss enables players to use the same tokens they played with at the casino for digital games – either online or through mobile apps built on the BSV blockchain.
‘We have a mobile ecosystem – we develop lottery games, roulette games, poker games, and we have slot machines coming – with all of these integrated very tightly into the crypto wallet’ says Dickson.
‘We think that the crypto wallet is going to start to replace messaging apps and things like that in the future. As people start to see crypto more as a day-to-day payment mechanism, replacing cash or credit cards, you’re going to want to have your casino platform tightly integrated into that crypto wallet.’
Central to the value proposition posited by Dickson and BitBoss for their iGaming products is verifiably fair gaming, ensuring that all games are played within the rules specified, with no opportunity for operators to change the parameters or results after a bet has been made – an issue all too frequently encountered by punters at present.
‘There are a lot of online casinos out there that seek to cheat people. They may not do it 100% of the time, but they may clip an extra 1 or 2 percent for themselves,’ says Dickson.
‘Anytime that a player loses, in their mind, they think to themselves “did I get screwed here?” and in a lot of cases, they did!’
These rogue operators have a marked impact on the reputation of the rest of the online gaming industry, who, in the absence of being able to verify the integrity of their games in an open and digestible manner, are tarnished with the same broad-brush strokes. To counter this, BitBoss use the unique capabilities of the BSV blockchain to enable a system that, in gambling lingo, is provably fair – a process whereby a player can be mathematically certain that the results of the game were fair, and that they weren’t changed in any way.
‘When a player initiates a gaming session, they send a dust transaction to the casino that says that they would like to initiate a provably fair gaming session. At that point, the casino creates an extended public key, which they send in a transaction back to the gambler,’ Dickson explains.
‘The gambler then takes the extended public key and creates their own public key. This is included in the op_return and sent along with their bet amount and what they’d like to bet on. The casino then takes the public key and creates the private key, which is then used as the seed for the pseudo-random number generator.’
When the casino sends the results back on the blockchain to the player, the player has the result in the private key. The player then has the ability to use their own private key, as well as the public key, to determine whether the correct private key was used as a seed for the result. The process ensures with mathematical certainty that the game and its result were provably fair.
‘With the blockchain, all of the transactions are visible for the entire world to see. All of the transactions, once they are on the chain, they can never be changed,’ says Dickson.
‘As a player, if you have a dispute or question about your transactions, you don’t need to call your casino anymore. You can match up the transaction ID in your crypto wallet with a transaction ID on a block explorer, so you can see if your bet made it in time or not. You can see if you bet $20 or $30. It’s a great way to start to move clients in the direction of blockchain because it helps give them more visibility into what’s actually happening.’
An added benefit of the blockchain-based provably fair system that BitBoss have developed is that it prevents attempts by players to double spend.
‘Because we take the outputs from the bettor’s transaction when they make their bet, we use those for the input when we pay them back,’ explains Dickson.
‘If they try to double spend us, our payback to them becomes invalid – so they can choose: do they want to double spend and just end up in a zero-sum game, or do they want to potentially win what they’re trying to win?’
Underpinning BitBoss and their array of iGaming products is the BSV blockchain – a restoration of the original Bitcoin protocol as envisioned by pseudonymous creator Satoshi Nakamoto.
‘What we have with BSV is a very secure blockchain that we can use for real money gambling, where block times don’t matter, double spends don’t matter, we have super-low transaction costs, we have scalability, we have proof of work and we have patent protection,’ says Dickson.
‘There’s a lot of blockchains out there that have spent a lot of time getting rid of proof of work so that they could get block times down. But as they bring those block times down, they bring security down.’
Security is of paramount importance for those in iGaming, with sites built off-chain using a traditional, centralized server-architecture, a frequent target for hackers. Likewise, says Dickson, real-world casinos are hypervigilant to security threats – both internal and external.
‘Casinos are constantly worried about security, they’re constantly worried about people walking out the door with chips or employees stealing,’ he explains.
‘Security is one of our main focuses. The integrity of the money system in a casino is huge, and now all of a sudden, we’re saying that every single transaction that goes through the casino has security built in by default.’
BitBoss utilizes unique capabilities of the BSV blockchain to make their offering more secure. Threshold signatures – an advanced security technique which allows for several parties to hold split pieces of a single private cryptographic key – are a key element to this. They enable multiple parties to sign together to authorize the sending of Bitcoin, as opposed to today’s more commonly used multi-signature schemes where different parties secure separate private keys which are collectively required.
What this means is that no single point of failure exists for threshold signature schemes, regardless of how many parties are required to sign to authorize sending of Bitcoin.
‘What secure split key or threshold signatures allows us to do, is in a very secure way have multiple parties come together to create that allocation,’ Dickson explains.
‘Multiple parties, the CEO, the CFO, whoever it may be, can come together and generate a private key that never actually exists anywhere.’
In a threshold situation, the whole private key never exists; each signing party joins to create the necessary ‘split’ components for a single signature. A subset of these parties can also come together to recreate the key in the instance that slices are lost.
‘We needed a method where casinos could backup their customer wallets,’ says Dickson.
‘We use secure split key or threshold signatures as a replacement for multisig. It’s patented on BSV and it’s only going to be available on BSV.’
Another advantage is privacy; transactions created from a threshold signature scheme are indistinguishable from any other transactions on the blockchain, which shows a single public key is used to sign the transaction. By way of example, you cannot see that 2 of 3 key slices were used by different “signers” to create a single threshold signature or what individual “signers” contributed those 2 of 3 key slices. In contrast, with multi-signature transactions, the blockchain will record the 2 (of 3) separate public keys used to sign the transaction.
Additionally, parties for a threshold signature can be easily (and more privately) removed or added via a process to create the threshold scheme, as opposed to multi-signature approach where ownership of each separate key must be transferred which could be insecure.
In addition to the unique security capabilities of technology available on BSV, Dickson says that the comparatively miniscule and reliable transaction fees associated with BSV makes it the right choice for entities looking to establish businesses built on the blockchain.
‘It becomes impossible to run a real, commercial business on a blockchain where you can’t easily predict how much fees are going to be. With BSV, you can go directly to the miners and you can negotiate fees,’ explains Dickson.
‘In our case, if we have a casino sign up, we look at how many transactions that we think they’re going to do on a yearly basis by replacing the ticketing system in slot machines. Then we go to the miners, we negotiate a fee for those transactions.’
Put simply, the unique set of features intrinsic to BSV, combined with the scalability and low fees associated with it, makes it the only choice for businesses building on blockchain, says Dickson.
‘If I can do all of this for fractions of a penny per transaction, without having to worry about managing and running back end systems, without having to worry about my customers’ money being stolen out of a database or a dishonest employee, I don’t have to worry about creating my own audit trails,’ he says.
‘That makes the question, why wouldn’t you start to think about using a blockchain based system?’
And when iGaming businesses do think about using a blockchain system, they should logically think of building on Bitcoin SV.