The online gaming industry is growing at an exponential rate due to the emergence of new technologies such as hybrid games, virtual reality (VR), and augmented reality (AR).
Casino operators use these technologies to differentiate themselves from their competitors and succeed in this highly competitive industry.
The global gambling market is expected to reach a value of around $565.4 billion, growing at an annual rate of 5.9% through 2022. And we are told that the projects out there have not scratched the surface on the potential of this rapidly growing market sector. So, why are we not seeing more players and more casinos out there?
There’s a bit of an issue when the term gambling is mentioned. We argue that gaming is principally defined by its interactivity, skill-based play, and contextual indicators of progression and success. In contrast, gambling is defined by betting and wagering mechanics, predominantly chance-determined outcomes, and monetization features that involve risk and payout to the player.
The main difference between the terms is that for gaming the outcome is achieved by skill, not chance, whereas for gambling, the opposite is true. Many gaming activities now include gambling features and vice versa. These activities are referred to as gambling-like gaming and gaming-like gambling.
How can blockchain revolutionize online gaming?
Blockchain technology makes Bitcoin and other cryptocurrencies possible by storing information in a mutually-shared ledger or decentralized databases. Initially used as a payment system by tracking account balances, these can track ownership of property, the terms and status of contracts, and any disputable data.
When the video game industry adopted blockchain technology, video game developers, as well as players who subscribe to their games, gained total power over their virtual worlds. These include for payment of and within games; putting game items on the blockchain; and even completely-decentralized virtual worlds.
Since blockchain games are decentralized, blockchain game assets (digital goods) are distributed among ‘players’. Blockchain games either issue their own token or use an existing token. With well designed token economics and gameplay, blockchain games are starting a new era in the gaming industry.
Blockchain in gaming enables interoperability profiles for players: Crypto traders and investors have the public address that they can use for transactions across different applications. If you create your games on the blockchain, your players can take their unique public addresses from one game to the other if they are on the same blockchain network.
Games built on top of public blockchains have an immense opportunity, and the early incarnation of blockchain-based games are already showing their potential. If you’ve played Stake, FunFair, Bitstarz, Trueplay, Trueflip or other games using blockchain technology, you would agree that gaming on the blockchain is the future of the gaming industry.
Blockchains are open and verifiable, this really helps in betting games as a player doesn’t want to trust anyone. Also, game rules and incentive mechanisms can be verifiable by anyone. This reduces the chances for scams. Using real assets creates real-world incentives, which makes blockchain games different from other platforms. Because of inbuilt incentivization, it’s easier to build games that pay on the blockchain.
What can solve problems encountered with online gaming?
For online gambling, you have to pick a trustworthy platform. Online games can be an unwitting front for malware operations and fraud. You should be careful to ensure you entrust your money and data to a legitimate entity.
Besides, some platforms can charge hidden fees that impact profitability. To counter this, the platform of your choice should be free of such concerns. Foremost, they should offer a fair and fun opportunity to make money.
Noticeably, some online gambling platforms have been accused of being arbitrary in their decision. Some tend to withhold payouts, shut accounts, and even impose shady rates. Here is where blockchain technology plays out its greatest advantage: transparency. The blockchain is an immutable, transparent ledger that can provide an accurate account of all gaming activities.
Those who play games have the advantage of all transactions–including wins and payouts, being recorded on a transparent digital ledger. Many people view casinos that conduct transactions in a black box as inherently unfair.
Blockchain technology helps with credibility and leveling the playfield for such concerned users. The addition of trust eliminates one of the fundamental concerns with other forms of online gambling. Online gambling using the blockchain can also reduce gambling fees and prevent fraud.
Online gaming can be an amazing pastime for anyone. Often, using these platforms is safe because it goes a long way in addressing some of the concerns typical of traditional online gaming. However, there are some fundamental limitations around blockchain games, which need to be solved first.
For now, each new innovation becomes a case study for what experts say gaming will be the first real large-scale use case for blockchain, revamping the industry and making games more immersive than ever. The future of gaming and gambling industries depends to a greater degree on how they navigate the remaining challenges that come with the blockchain.
Still, it is highly recommended that you conduct your due diligence to establish the reliability of a platform before getting started. Finding out that they deploy DLT can give you a great reference point to verify their reliability. If you’re feeling lucky, check out some sites of blockchain-based gambling platforms which includes SP8DE, LetBet, Trueplay, TrueGame, CoinSaga, among others.
Market Analysis Report (24 Sep 2020)
DACOM Summit Announces CFTC Commissioner Dan Berkovitz as Keynote Speake | Winklevoss Twins’ Gemini Exchange Now Allows Buying Crypto With British Pound | Leading Crypto Payments Platform Wirex Announces Launch of $1.2 Million Crowdfunding
Leading crypto payments platform Wirex has announced its first crowdfunding round, aimed at raising £1 million ($1.2 million) with the intention to scale-up in the coming months.
In a press release, the fintech firm detailed it is giving customers and fans the opportunity to invest in it via the crowdfunding round, to which pre-registrations are now open. The crowdfunding round is expected to be “one of the largest and most successful campaigns” carried out by the equity platform Crowdcube.
Pavel Matveev, CEO and co-founder of Wirex, said the decision to crowdfund came at a crucial period in the company’s development. He said:
“Wirex has been making huge strides in changing the financial landscape, by making it easier for everyone to access cryptocurrency and spend it in the everyday. By offering a platform that bridges the traditional and digital economy, we are helping to encourage the mass adoption of cryptocurrency for future generations.”
Since 2014, Wirex has become a popular platform for crypto-enabled payment solutions and providing businesses and individuals an alternative to conventional finance.
Brazil’s Rainforests Are Getting a $182 Million Blockchain Boost
The world’s largest meat-processor aims to use blockchain technology to curb the country’s rising deforestation.
- A Brazilian meat-processor announced a $182 million fund on Wednesday to curb deforestation in the country.
- The firm will invest over $44 million until 2025 and expects other companies to match funding efforts.
- Deforestation has hit record levels in Brazil, which is facing backlash for its failure to control the concern.
Brazil-based JBS, the world’s leading firm for meat processing and packing, said Wednesday it would deploy blockchain technology to combat the rising ill-effects of deforestation by meat suppliers in South America, according to news outlet Reuters.
The firm vowed to monitor its entire supply chain using blockchain by 2025, amidst widespread concerns from environmentalists about rapidly diminishing forest cover in the country. Brazil’s meat industry, among others, is said to contribute to deforestation as meat producers clear out vast areas for cattle pasture.
So far, meatpackers in Brazil, such as JBS, have ensured they do not source meat from farms that illegally cut forests. However, such a system just monitors and measures activity from its final suppliers—leaving space for indirect suppliers (which supply to JBS’s suppliers) to evade such monitoring and eventually manage to sell their product to firms like JBS.
But blockchain technology could present a solution for that, said JBS. It launched a $182.77 million fund yesterday to foster social and economic development in the Amazonian rainforest region, aiming to invest over $44 million in the next five years, and another equal amount from then on to 2030.
Other local and international firms are expected to join the project and contribute the remaining amount, the report noted.
The funds will allow JBS to build an expansive blockchain system that tracks every supplier on its meat supply network, both direct and indirect. “Currently, the company does not monitor indirect suppliers and no company does so. But we plan to close this gap using technology,” said JBS CEO Gilberto Tomazoni.
Tomazoni added the firm’s 50,000 direct suppliers were, however, already monitored. Meanwhile, JBS is expected to launch the system in 2021, starting in the Brazilian state of Mato Grosso.
The development comes at a time when global meat importers, such as Norway, have threatened to pull out their investments from Brazil if the country fails to curb deforestation, noted the report.
Deforestation has remained a global concern since the last decade, with regions like the Amazonian rainforest in South America among the most affected. Data from last year showed that Amazon deforestation hit levels last seen in 2006. So, it will take a major effort to turn the situation around.
Iran Is Ripe for Bitcoin Adoption, Even as Government Clamps Down on Mining
Iran-based bitcoiner Zahra Amini was used to answering questions on cryptocurrencies, but usually about their relationship with crime. So when a 70-year-old man recently asked her to explain crypto because he no longer wanted to rely on the national rial, Amini felt something had changed.
“If people that age are thinking about storing their wealth in anything rather than the national rial, it’s because they are just losing confidence in it, and more and more people are looking for alternatives,” Amini told CoinDesk.
Bitcoin is increasingly relevant in Iran as the country suffers from an economic downturn fueled by U.S. sanctions and the COVID-19 pandemic. Bitcoin’s independence from government control makes it an attractive option for individuals hoping to hold on to the value of their earnings as the rial suffers from inflation.
Amini openly advocates for bitcoin and joked that she wouldn’t mind stopping people in the streets to tell them about the cryptocurrency. Speaking to CoinDesk, fellow Iranian and “bitcoin maximalist” Ziya Sadr went so far as to say that holding wealth in rials can mean losing money everyday.
Iran’s famously repressive government has not snuffed out cryptocurrency. It has recognized bitcoin mining as a legitimate industry that could bring wealth into the country, though it risks suffocating it with too much regulation. The country’s central bank has also endorsed the creation of a national digital currency.
After the U.S. withdrew from the nuclear deal with Iran in May 2018 and reinstated economic sanctions, Iran’s economy fell into an ongoing recession. Its national currency, the rial, lost over half of its value against the dollar. In June 2020, with the pandemic putting pressure on economies across the globe, one dollar was worth more than 66,000 rials. By August, Iran’s year-on-year inflation rate rose over 25% despite President Hassan Rouhani’s government trying to curb it, which included replacing its local currency with the toman (each worth 10,000 rials).
Although bitcoin may help Iranians circumvent U.S. sanctions in certain cases, it is now showing promise as a hedge against inflation. Some Iranian students abroad are using bitcoin to pay their tuition, and a convenience store in Sanandaj, the capital of Iran’s Kurdish province, is now accepting the digital currency as payment. According to data provided by Iranian bitcoin exchange EXIR, the platform saw a 200% increase in users over the past three years.
The platform, launched in February of 2017, now serves over 63,000 users. A new Chainalysis report on the geography of crypto revealed Iran as the second highest-ranking country in the region for crypto adoption, placing 52nd on the Global Crypto Adoption Index.
“I know people from my family who were killed for holding gold. So I know what bitcoin offers to us.”
While Iranians are quietly exploring new use cases for what Amini calls “magic money,” the government has been hyper focused on regulating the local bitcoin mining industry, whose growth is partly due to cheap, subsidized electricity. Bitcoin mining was legalized last year and Iran still appears to be a mining hub with the government approving over 1,000 mining permits since then. But government scrutiny and compliance requirements are making it difficult for miners to operate.
What bitcoin offers
Ehsan Ghazizade launched Tehran-based crypto exchange EXIR in 2017, the same year bitcoin had its historic bull run. Back then, Iranians could register on international exchanges like Bittrex and Poloniex, Ghazizade told CoinDesk. But in 2018, the U.S. government exposed the identities of Iranians involved in a crypto hack. Last year, the Helsinki-based LocalBitcoins peer-to-peer trading platform cut off Iran-based users from accessing its services after suspicions arose that Iranians might be using crypto to circumvent sanctions.
In such an atmosphere, Iranian users started looking for a local platform to invest and trade their crypto assets without missing out on bitcoin price jumps, Ghazizade said.
Even though the number of users on his platform grew quickly over the three years, EXIR’s trading volumes tell a different story, showing a drop in 2020 despite the inflationary rial and the bitcoin price run.
“Because the bitcoin price fluctuation in Iranian toman is very high and most Iranian users cannot trade in huge amounts, we have grown in the number of trades but saw a drop in total volume at this time span,” Ghazizade said.
The self-described “bitcoin maximalist” Sadr, for example, does not trade bitcoin at all. He gets paid in bitcoin for providing tech services for companies abroad. The pinned tweet on Sadr’s profile is a list of payment methods he cannot use from Iran like Visa, Master, Apple Pay, and PayPal. So whenever bitcoin is accepted as a payment method, mostly on the internet, he uses the cryptocurrency.
Bitcoin provides privacy in transactions, and is not completely vulnerable to censorship from the government, Sadr said. He primarily uses bitcoin to purchase virtual private network (VPN) services so that he can bypass internet censorship to access apps like Telegram, which are banned in Iran. He also buys digital merchandise including game accounts and gift cards.
In 2017, before U.S. sanctions, Iran set the poverty line at around $480 a month. At the time, 33% of the population (24 million people) fell below the line. Even for Sadr, who earns a decent living, purchasing a smartphone costing upwards of $200 is a difficult task.
“If you get paid $500 a month in Iran, you’re on the wealthy side,” Sadr said.
He prefers to store his earnings in bitcoin because he has the option of storing it electronically. In addition to the cap imposed on dollar or euro deposits that can be held in regulated banks in an effort to support the rial, a general distrust in traditional banks has led to people storing U.S. dollars under mattresses at home. But physically holding dollars or gold comes with its own risks of robbery and violence.
“I know people from my family who were killed for holding gold. So I know what bitcoin offers to us. If I’m changing my income to bitcoin, it’s because I don’t want to get into trouble holding it physically and I don’t want to lose the value of my money,” Sadr said.
Regulating banks and exchanges
In 2018, the central bank of Iran (CBI) banned the country’s banks from dealing in virtual currencies. According to Iranian crypto lawyer Arman Babagol, the ban was in line with most other jurisdictions concerned about money laundering and terrorism funding. But there was also the added fear of a digital currency undermining the rial: the government debated banning Telegram when it announced its initial coin offering (ICO) in 2018 for the “gram” token.
Iran ultimately didn’t ban citizens from dealing in cryptocurrencies, but warned them of accepting the responsibility of risk should they decide to use it, Babagol told CoinDesk. He said that as one of the few attorneys in the country familiar with crypto-related laws, he is now inundated with crypto scam cases. He also handles mining cases, and one took him from Tehran to the Pakistan border to help a client that was accused of stealing electricity from the grid to power bitcoin mining.
Right now, crypto exchanges don’t need a license to operate in Iran, Babagol said. Ghazizade confirmed this but doesn’t feel that will be the case for long. This year, amid fears that the pandemic will encourage capital outflow, the Iranian government is looking to tighten rules around cryptocurrencies under currency smuggling and foreign exchange laws to protect the rial against further devaluation.
Even before sanctions came into place, the government began looking into the creation of its own national cryptocurrency. This state-backed currency would not be decentralized like Bitcoin, and could potentially even lead to the prohibition of unapproved digital currencies. Last year, four of Iran’s leading banks partnered with blockchain startup Kukonos to kickstart project “PayMon”: Iran’s own gold-backed digital currency. But Soheil Nikzad, who worked on the Kukonos project, told CoinDesk that the PayMon initiative has slowed down pending government approval after passing the regulatory sandbox.
Borna, a second cryptocurrency project directly funded by the central bank of Iran, is developing the infrastructure to support a digital currency.
Meanwhile bitcoin mining continues, but with restrictions.
In 2016, Omid Alavi watched his brothers mining bitcoin from their home in Iran, and saw a business opportunity. A year later, the brothers had already branded their company Vira Miner and were opening industrial mining farms equipped with thousands of imported ASIC Antminer V9s.
At the time, mining was not regulated and subsidized electricity costs were as low as $0.006 per kilowatt-hour. This piqued the interest of Iranian miners despite the fact that the country didn’t produce its own mining rigs. Equipment was mostly smuggled into the country from China, Alavi told CoinDesk. By the summer of 2019, he was overseeing up to eight farms.
“Back then, it was a miner’s paradise,” Alavi said.
The government grew increasingly aware of the large spikes in electricity consumption by mining farms like Alavi’s. Last year, deputy minister of electricity and energy Homayoun Haeri proposed miners should not be allowed to tap into the heavily subsidized electricity meant for citizens at no additional cost or tax. Days later, authorities shut down two mining outfits following a power spike and seized over 1,000 machines from two abandoned farms.
Yet in July 2020, less than a month following the incident, Iran declared bitcoin mining legal, and the industry came under the jurisdiction of Iran’s ministry of industry and mines. Haeri announced the government will vote on modified electricity rates for miners.
According to Alavi, the following month, the government stormed his farms and seized over 6,000 machines. The incident cost him over $5 million and he is working with a non-governmental blockchain association to negotiate the return of his rigs even though their value has since depreciated, Alavi said.
Now, Vira Miner has one of the 1,000 or more permits issued by the government to set up a farm. Local news reported around 14 farms have set up shop with these licenses. However, Alavi said miners need a second license to actually start operations. He is still waiting for one.
Now that mining is legal, Alavi said he has to pay a tariff of over 20% on future imported mining equipment. Mining operations are fined for using subsidized electricity and equipment suspected of being smuggled into the country. According to Alavi, the ministry of energy is selling gas to bitcoin miners at 500 times the price it’s sold at to regular power plants. He also said that electricity rates are now higher for miners, costing up to $0.09 per kilowatt-hour. Earlier this year, the government gave miners a month to register in an effort to mitigate equipment smuggling and illegal mining.
In April 2020, the government licensed a Turkey-based company called iMiner to launch a bitcoin mining operation in Iran. The firm allegedly sank $7.3 million into setting up its mining facility in the country.
But a Telegram group with over 81,000 members is accusing the firm of running a Ponzi Scheme, paying initial investors with funds from new investors without actually mining anything. Prominent Iranian bitcoiners including Alavi and Babagol recently joined an advisory YouTube panel that openly accused the government-approved company of misleading investors.
“Between last year and now, [Iran] became a hell for miners,” Alavi said.
Mining continues, however, with Iran having a 4% stake in global hashrate (the amount of computing power a country contributes to mining) and Iranian power plants selling excess power to mining operations.
Meanwhile, veteran bitcoiners like Amini and Sadr are witnessing how crypto is actually changing lives. Adoption is small and slow, but it’s nonetheless increasing, Sadr said. According to Amini, people from the crypto community may come into the space to simply buy VPN or a book that they cannot buy otherwise.
“But then, you can see some concerned mother who just wants to send some money to her child studying abroad,” Amini said, adding:
“You know, bitcoin is just more usable and more people are coming to this space not because of the technology, but because they don’t have any other option. We could consider this a beautiful thing.”
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