Bitcoin creator Dr. Craig S. Wright, probably more known by his pseudonym Satoshi Nakamoto, gave some enlightening information about online gambling on blockchain and how it is enormously different from the crypto casinos that are becoming popular. In the second episode of Hashing it Out with Becky Liggero, the nChain chief scientist explains why Bitcoin SV (BSV), the rebirth of the original Bitcoin, is perfect for the gambling industry.
Dr. Wright has many roots in the gambling industry, and these experiences and knowledge were incorporated into the Bitcoin white paper. In 1998, Dr. Wright was contracted by Lasseters to provide much-needed guidance on regulatory requirements and security systems in order to launch a licensed online casino by Lasseters. Centrebet was also his client when he was a BDO auditor. Dr. Wright also worked with Playboy Gaming, MGM and Bodog over the years. He even developed an online poker platform on Bitcoin after it was launched in 2008. In his own words, “part of what I was doing with BDO overlaps with the concept of Bitcoin.”
“Bitcoin is the first digital currency with tracing. With the ability to have a ledger that allows people to find out where the money came from. That’s the real distinction that no one’s talking about. It is the first traceable electronic money system,” Dr. Wright said.
And this is the reason why BSV is ideal for online gambling. With a set-in-stone protocol that acts as a rock-solid foundation and a blockchain that is public, transparent, immutable, secure and infinitely scalable, it will not only minimize cheating because of a traceable history of transactions, but will also provide operators with the lowest priced transaction fees.
“When you pay it can all be recorded, it can be a complete audit trail, simplifying the reporting obligations of the casino and also giving you peace of mind because if something goes wrong, you now have proof of what went wrong,” Dr. Wright explained.
Furthermore, websites crashing because of the massive amount of data space being used by players will not be a concern anymore as the BSV blockchain can handle big and bigger data as it continues to scale. The current average fee per transaction is only at 0.0032 USD; and as the network continues to scale—the test network already processed a record-breaking 9,000 transactions per second—nanotransactions will be made possible, lowering transaction fees even more.
“Think of how many times people pull a lever a second in somewhere like Caesars. Now extend that out to a global system where there could be people doing virtual slot machines globally for a tenth of a cent slots. How are you going to actually do this in a way that can be managed and secure if you’re getting a million potential transactions a second,” Dr. Wright asked.
Not with BTC or ETH, obviously. With their unscalable blockchain that can only handle a few transactions per second and their super high transaction fees, they cannot accommodate the technical requirements of an online casino. Scalability of network, transparency of data and cost-efficiency are crucial for online gambling on blockchain to work. It also has to be able to work within current regulatory requirements, which is inherent in the BSV system. And this is in stark contrast to crypto casinos sprouting up everywhere. Most are unlicensed that even allow underaged players to bet using different kinds of cryptocurrencies.
“Most of these at the moment are all about laundering. So they are mixers. They put their money in, try to get away from tax or other obligations, take their money out. Long term that’s going to be a big problem because if you have mixed funds, then you’re going to lose your funds,” Dr. Wright warned.