I’m publishing this blog post to share my thoughts on the state of crypto-gambling today, and what I see in store for the future.
I’ve been following Bitcoin casinos since the launch of probably-fair-pioneer “BitZino” in 2012. Since then, I’ve watched crypto-casinos evolve: crowdsourced bankrolls, on-chain fairness, auto-betting systems, hot-cold wallet management, HTML5 awesomeness, and, most recently, third-party “shared” bankrolls (i.e. MoneyPot).
However, there’s always been one glaring problem that hasn’t been addressed, and that’s the fact that every Bitcoin casino has a single point of failure: its operator. Because Bitcoin casinos are anonymous in nature, casino owners regularly run off with the bank, taking stacks of cash worth of player deposits, investments and winnings with them.
In 2014, Dice.Ninja’s owner vanished with more than 2,000 BTC ($1.8 million today).
The obvious high-level solution is a decentralized Bitcoin casino — a system where the game developer doesn’t have unfettered access to every deposit — and while that sounds fantastic, it’s not very realistic in practice.
Many have tinkered with the idea of multi-sig transactions as a solution and an anonymous developer even e-mailed me a whitepaper with a thought-out concept — yet it still contained massive flaws.
I concur, after many years of deep-thinking, that there is no mathematically sound way to protect a casino bankroll with Bitcoin alone.
Ethereum is far more complex than Bitcoin; each “address” is a smart-contract written in decentralized computer code. Because of this, the capabilities of Ethereum commerce far exceed that of the Bitcoin blockchain.
Ethereum, which allows for code to be run as expected without manipulation, has sparked the creation of new casinos leveraging the state-of-the-art technology. One of the most popular of these is vDice, which holds the title of the most popular decentralized application in Ethereum.
While these projects have been another great step forward, they still came with the very same vulnerabilities that early Bitcoin casinos had.
One project that is about to attempt to make a groundbreaking change is Contingency, an Ethereum solution that has set out to finally solve the huge problem of centralized bankrolls and near-absolute control. It works by completely cutting out the middleman between the savvy investor and players — a change that, if successful, should change the direction of crypto-gambling for good.
Contingency — once dubbed the “Uber for casinos” — has the ambition to revolutionise the crypto-gambling space and finally introduce the security and reliability it deserves.
Contingency is an entirely different beast; it’s a network which acts as a fully peer-to-peer marketplace for wagers — a sort of decentralized bookmaker. Contingency itself doesn’t hold any funds nor does it have a hand in processing bets; this solves the greatest problem in crypto-casinos: owner misconduct.
In Contingency, every player is matched instantly with a “banker”, which is essentially another user that has offered their funds to be wagered against. Bankers reap the reward of a one-percent edge on all bets, which will see them profit over the long term; whereas players get to try their luck with the absolute certainty that their funds are safe and bet outcomes aren’t manipulated.
The great product of all of this is: Contingency also allows anyone — and I mean anyone — to create their own games (roulette, blackjack, whatever!) while leveraging the entire crowdsourced bankroll and security of the Contingency network.
Today, Bitcoin casinos see more than $5 million USD wagered each day. I hope to see a huge slice of the volume move to open-market solutions like Contingency over the next few years, as we enter the next chapter of crypto-gambling.
If you plan on moving some of your investment bankroll over to the Contingency network, here’s what you should know:
Contingency is launching its ICO on February 1st, 2017 (or Ethereum block height 3,100,000).
The pre-sale has bonuses for getting in early. During the “power hour” (the first hour of Contingency’s launch), investors are rewarded 170 CTY tokens for each 1 ether invested (170:1). The rest of the first week rewards 150:1, and the ratio keeps dropping until the final week of 100:1. If you’re planning on making an investment, I’d recommend to get in early to make the best return possible.
Understand the risks: Read my long-form post on Bitcoin casino investment.