With blockchain becoming a buzzword in daily conversation, it’s inspiring to see how far it has come since bitcoin first appeared about a decade ago. A growing number of entrepreneurs and developers are adopting blockchain. It is evident that blockchain is poised to disrupt brands far and wide, and it promises to disrupt the lottery industry at large soon.
It is difficult to determine which sites are safe, honest, and trustworthy due to a lack of transparency. But could blockchain technology have the potential to reinvent the online lottery industry? In this article, we will discuss the potential of blockchain for the online lottery industry.
First, What is Blockchain?
Blockchain technology, in essence, enables a public distributed ledger system through decentralized software mechanisms. Transactions and assets are tracked and recorded without the need for a central trust authority. In addition, hackers and other cyber criminals cannot change or steal data since the system relies on public key encryption or cryptography. A rules-based smart contract allows the peer-to-peer exchange of data, assets, and currencies more efficiently, transparently, and cost-effectively.
Introducing Blockchain Technology
Some attempts have been made to organize a real internet lottery in response to this system. Nonetheless, traditional lottery methods, which involve the use of a centralized organizational structure (i.e. a single server owned by a single individual), have long been viewed with suspicion because there is no one but a narrow circle of interested parties who can check the RNG (random number generator) or any other parameters of the lottery.
Unlike traditional databases, blockchain technology is a distributed database structure with a secure write-forward authentication system for adding information without any single point of failure. All full nodes participating in the blockchain network receive a copy of the ledger, whether they are computers, servers, or devices. Hence, it can be used in the lottery and gambling industries. Below is how blockchain can benefit the industry.
Achieving Privacy and Accessibility
It has become increasingly popular for casinos to accept cryptocurrencies as payment methods, either in place of fiat-based ones or as an alternative. Several advantages have been well documented. Depending on the platform, users can gamble anonymously by using cryptocurrencies, without providing copies of documents or creating accounts.
Furthermore, cryptocurrencies offer a low entry barrier for new players and enable them to circumvent gambling regulations that only pertain to fiat.
The Smart Contracts Concept Can Improve Fairness
Ethereum’s blockchain has focused particularly on smart contracts. A digital agreement would grant parties transparency in any transaction by allowing their terms to be enforced by computers. Through blockchain technology, any potential obstacles to transparency will be eliminated because an impartial network will ensure the contract is followed.
By utilizing a blockchain in online gambling, there is no alteration of the rules, which are clear to every party, and an instant payout is guaranteed. As no site governs the game, there are no concerns about a site withholding winnings. There is no middleman to interfere with the player’s funds. Payments are made directly into the contract (and withdrawn if the player wins).
Lotteries and Blockchain: Creating a Supportive Ecosystem
With unprecedented industry hype, blockchain is a unique combination of technologies that may serve as a solution to one of the most pressing business challenges of today — creating greater trust, transparency, and accountability between all parties involved in transacting and interacting. Despite the technology’s infancy, blockchain has begun to consume the strategic planning cycles of decision-makers across industries.
This technology has the potential to bring a significant element of trust to online gambling. Many organizations, like NZ Lottery, could potentially benefit from the use of blockchain technology to increase trust, transparency, and accountability in its operations. Blockchain technology will provide all parties with a verifiable, irreversible record of transactions. A gambling platform utilizing this technology, therefore, offers transactional transparency.