Understanding the world of Bitcoin and cryptocurrency can sometimes feel like trying to learn a new language. For many, the mere exploration of the cryptocurrency world can seem like venturing into a minefield. One of the most complex aspects of this digital currency realm is the world of smart contract betting. Over the last couple of years, it is this very complexity that has inspired fascination and intrigue for many in the industry. BitcoinGambling.org decided to tackle this intriguingly complex world and attempt to explain: “What is smart contract betting?”
## What is smart contract betting?
Before we jump straight into the intricacies of smart contract betting, it is important to first understand the foundation on which it stands – smart contracts. Introduced to the world via Ethereum, smart contracts are lines of code stored on a blockchain network that automatically execute when predetermined terms and conditions are met. In the context of gambling, these contracts enable a whole new level of trust and fairness to the online betting process.
Here’s how it works: instead of relying solely on a gambling site’s assurance that it is providing fair odds, smart contracts ensure it. For instance, two friends wagering over who would win a football match would create a smart contract. This contract would take the wager, hold it, and pay out to the winner once the match results are verified with no need for a middleman. This process is hence known as smart contract betting.
## Scope in the industry
Since their inception, smart contracts have quickly gained popularity in many areas of digital life, particularly in the blockchain and cryptocurrency space. When applied to gambling most notably through decentralized casinos, smart contracts offer some serious advantages over traditional online casinos. One such advantage is trustless wagering – no longer do players need to trust casinos to act fairly. Instead, players can look to the unchangeable code of smart contracts to ensure fair actions.
Moreover, smart contracts provide enhanced transparency with every wager being fully visible and recorded on the shared ledger, establishing a new era of auditing. Likewise, they result in faster and more efficient payouts since they immediately validate the wagering results without any need for intervention.
With such appealing characteristics, it is easy to see why smart contracts have caught the eye of the online gambling industry. A plethora of online casinos are already exploiting this technology to provide better, more efficient, and most importantly, fairer services.
## Ensuring smooth execution
While the allure of smart contract betting is clear, it is not without its challenges. The main issue surrounds the validation of real-world events, such as sports results, which are needed for the contracts to execute. This issue arises given the absence of a centralized authoritative body within the decentralized blockchain network to validate these results.
To tackle this, a solution often used is the deployment of ‘Oracles’ – third-party services that feed real-world information into smart contracts. However, this gives rise to another concern, that of trusting these Oracles. Still, solutions are being found through decentralized Oracles that are transparent and can be audited by anyone involved in the smart contract.
## Future implications
Decentralized betting holds immense promise to level the playing field, ensuring fair play, and encouraging transparency. Likewise, experts are captivated by the potential of smart contracts to dramatically transform how we gamble online. However, like any burgeoning concept, it is not without its challenges. As it steadily navigates these issues, it is becoming increasingly clear that the intersection of gambling and blockchain offers exciting opportunities that are hard to ignore.
So that’s it – smart contract betting summarized. Admittedly, it is a complex topic but then again, it is this complexity that makes it so interesting. With trusted transactions, elimination of the middlemen, and ensuring unparalleled transparency and auditability, smart contracts can revolutionize the way we perceive and interact with online gambling.
Smart contract betting has seen a steady rise and BitcoinGambling.org will continue to keep its readers updated about every novel development in this potential-packed sphere.
Sources:
1. “Smart Contracts.” Investopedia. https://www.investopedia.com/terms/s/smart-contracts.asp
2. “What Is Smart Contracts and Blockchain Gambling?” CoinGape. https://coingape.com/what-is-smart-contracts-and-blockchain-gambling/
3. “Smart Contracts In Gambling.” SoftSwiss. https://www.softswiss.com/knowledge-base/smart-contracts-in-gambling/
4. “Smart Contracts For Online Casinos.” Bitcoin.com. https://news.bitcoin.com/smart-contracts-for-online-casinos/
5. “Ethereum Smart Contracts: How do they work?” Binance Academy. https://academy.binance.com/en/articles/ethereum-smart-contracts-how-do-they-work
