The cryptocurrency space is particularly well-suited to online gambling. It’s an industry that could benefit from revolutionary payment systems, as well as greater transparency and cutting out of middlemen. Thanks to the innovative technology that is blockchain, many start-ups have radical visions of how they can overhaul existing norms within the industry. It’s likely that this ongoing wave of innovation will result in businesses performing more optimally, and hopefully this streamlining will result in savings and improvements to existing services for the end users.
One of the first ways in which blockchain technology is shaking up traditional businesses is with funding. Enter the ICO.
What is an ICO?
ICO stands for Initial Coin Offering. The similarity between the term ICO and IPO is intentional. They’re both ways for a new company to get funding. The difference is exclusivity. IPO’s are reserved for accredited investors. Meanwhile, anyone with cryptocurrency can fund an ICO.
If a company has an idea, they can create a whitepaper, and a token, before offering it to the public via way of ICO. There’s not much more to it than that. Each project will have different rules for their ICO. Some might have a hard cap on the number of funds they are seeking, and others might not. Each project will have a different number of tokens as the maximum they are selling at the ICO too. For argument’s sake, let’s say that they have a hard cap of $1 million, and the total number of tokens that they’ve created is also one million. This makes each token worth $1. The funder hopes that successful innovation on behalf of the company will make more people want to own these tokens, and the surge in demand will create an opportunity for the investor to sell their tokens for more than $1. This is an oversimplification since ICOs almost always have tokens allocated for development, marketing, legal issues, and a myriad of other purposes. These should be spelled out clearly in the project’s whitepaper, or somewhere on their website.
As mentioned, blockchain-based systems present plenty of opportunity for the gambling industry. The notion of provably fair betting is taking off. This uses the immutable ledger that is the blockchain to provide proof for players that another outcome is indeed possible for every event. It’s akin to being able to count the cards in the dealer’s shoe after every hand of blackjack.
In addition, innovative new payment systems like those provided by smart contract technology can create an additional level of security for the player. It’s likely that in the future, gamblers won’t need to rely on centralized platforms to store their money. Their funds will be locked into a smart contract and this will guarantee payment to the casino if one event occurs, and payment to the player if another does. It’s thought that such systems will run directly from cryptocurrency wallets themselves and therefore only the funds tied up for the given hand will ever be at risk.
Many of the ideas that will become the norm in online gambling are little more than that at present. For them to get off the ground, they require funding. That’s why we’re currently seeing so many new sites appearing regularly, each claiming to have their own innovative proposition and hoping to fund it using their own ICO. Unfortunately, some of these are probably little more than quick cash grabs by people hoping to cash in on the ICO fever that has gripped the cryptocurrency space since this summer. However, others will likely provide innovation that will completely revolutionize the way we place bets on games of chance and sporting events for years to come. Being able to tell which is legit and which is less so, that’s the hard part.
Examples of betting ICOs
As we’ve already covered, it’s difficult to tell which ICO is going to be a real money-maker and which is going to flop entirely, or worse still, which developers are going to disappear without a trace immediately following their round of funding.
The following is in no way investment advice. It merely aims as a primer to betting oriented ICOs. If you decide to back one of these projects do so after conducting many more hours of research than simply this article. Each has a whitepaper that needs thoroughly reading, and a team which requires researching. Don’t just look at the names on the website either. Find their LinkedIn pages, and what they have worked on previously. Also, remember, this space is hugely experimental, and even well-meaning projects could completely fail. With that cautionary notice out of the way, let’s look at a few gambling ICOs.
CoinPoker hopes to use blockchain to solve “the key obstacles inhibiting the growth of online poker today, namely avoiding payment processing issues, managing game integrity and creating purely random number generation.”
The fundraising is set to run from November 2017 to January 2018. The platform is then expected to launch in February. Updates will continue throughout the spring. These will include a tournament series, support for mobile devices, and even a truly fair random number generator. According to the developers, the site is ready to go following the ICO which should please investors who are used to seeing nothing for months from similar projects within the space.
This one’s a football betting platform that’s based on the Ethereum blockchain. Goal Bonanza hopes to tap into the $3 trillion global sports betting market using their GOAL tokens. They are hoping that by streamlining the service using the blockchain, they can offer more lucrative odds than their more established competitors, as well increased bonuses. They are also hoping to do away with the necessity of identity verification, and the sharing of sensitive details such as bank account information.
The platform purports to be 100% fair and transparent. Payments are handled via a smart contract system. What’s more, all holders of ETH tokens will get 10 GOAL tokens airdropped into their account entirely for free. Not bad at all!
As you’d expect, BetterBetting hopes to make the experience of betting, well, better. To do this, they aim to use the BETR token. Those behind it want to establish a truly decentralized sports betting platform online. The goal is to create a peer-to-peer system that relies on no central party. This will be provably fair and should pave the way for additional gambling opportunities. The software will be an entirely open source in its design and distribution.
BetterBetting hopes to extend their service to jurisdictions where the law forbids online gambling. Using a global liquidity pool, they’re hoping that it will be possible to provide even greater maximum bets.
The platform’s funding is scheduled to continue until January. Following this BetterBetting have published a rather extensive roadmap for 2018. Check out their website for more details.