A decade ago, cryptocurrency was a new term to many people. However, courtesy of the popularity of Bitcoin, people became familiar with various types of cryptocurrencies, including Ethereum.
Over time, the cryptocurrency market continues to advance, with the future of crypto gambling being the Ethereum smart contracts. Ethereum is a platform that facilitates cryptocurrency transactions. With the onset of the Ethereum smart contracts, the future of online betting is set to get better.
Understanding Ethereum Smart Contracts
A smart contract refers to a program, a collection of code and data which runs on the Ethereum blockchain. So, smart contracts are basically a unique type of Ethereum account. As an account, smart contracts can transact over any network.
Unlike other accounts, smart contract accounts are not operated by a user. While on the network, user accounts interact with the smart contract once they execute functions or submit transactions.
As a program, smart contracts define certain rules, similar to a contract, and enforces these rules through the program code. Therefore, a smart contract is a computer code or program that is stored on a blockchain platform such as Ethereum and executes some or the entire part of the agreement or contract.
How Smart Contracts Function
You fully understand what a smart contract is. So, how does it function?
A smart contract can be put in place to complement a traditional contract and execute the set provisions. Alternatively, it can be a sole manifestation of the agreed contract between parties. For example, an agreed transfer of funds from person A to C.
The program is replicated on multiple nodes of the blockchain it is run on. Therefore, the platform benefits immensely from security, immutability, and permanence. The replication also means that once a new block is added to the platform on which the smart contract runs, the program will be in turn, executed.
So, assuming the parties have initiated gotten into a contract and initiated transactions then there are some aspects which the parties must meet. The smart contract will then execute the necessary steps to ensure the set agreement is met by either party.
On the other hand, if no agreement was made and no transaction was initiated, then the smart contract code will not execute any steps. The majority of the smart contracts tend to be in one programming language which suits the majority of the computer programs.
Why Smart Contracts is the Future of Online Gambling
Bitcoin was the first common cryptocurrency to be traded. With time, Ethereum joined, and build on the already set framework of Bitcoin. Currently, Ethereum offers more than currency for its users, unlike Bitcoin.
Ethereum facilitates different functions such as transactions in insurance compensations, online gambling and real estate contracts. Smart contracts form the principles through which both parties ensure they execute their side of the contract.
Smart contracts eliminate the need of a third party in transactions, which is majorly a central government authority. It acts as the third part by algorithmically confirming, validating, and auditing the movement of assets. It ensures that all transactions are secure, transparent, and are conducted in a timely fashion.
Illustration: Let us illustrate how smart contracts function and how they will evolve the gambling industry. Take an example of online gambling slots like those of Bitcoinbuster.com. The success of any casino relies on its ability to make its customer base trust them.
Smart contracts help build gamblers’ trust by allowing the users to publicly access the game’s historical data. The information is readily available and open to the users who can verify the game is fair and true.
When using smart contracts, the casino can barely change or alter the displayed pay-out ratio because the ratio is cryptographically secure.
That is just one of the numerous benefits of smart contracts. The contract runs on a predefined code “if/then”. Let us take an example of an online gambler who bets on Ethereum on the color red, and the wheel lands on red (the “if). The code is designed in a way that it will automatically return the winnings to the gamblers private wallet (the “when”)
This is a principle that can be flexibly applied to any online gambling sector be it fixed sports odds, peer-to-peer wagering, heads or tails, or any other gambling game. With smart contracts, an online casino can operate in a secure, automated, and transparent way. These aspects will help the casino gain trust and credibility from the vast gambling community.
Given the advantages of using smart contracts, most online gambling sites are concentrating on adopting the use of this program. Most of these online sites are relying on Ethereum as their preferred blockchain due to its versatility. Clearly, smart contracts are the future of the online gambling industry.