The Unknown Future of Blockchain Gambling
Two days ago, the Dapp Vdice reached its ICO crowdfund goal of $1 million (USD) in a mere 90 minutes becoming the first fully decentralized gambling platform on the Ethereum Network. Essentially, Vdice is the first profit-sharing cryptocurrency casino of its kind. Unlike other blockchain casinos, Vdice users need not to register or create an account. Each play, or roll of the ‘dice’, generates its own unique smart contract. Using one of the various betting pools (addresses) on the platform with different rates of winning probability, all a user needs to do is send Ether (ETH) to a wallet and make sure they at least include the minimum bet which of 180,000 gas [0.0036 ETH]. Once the transaction is sent, a cyborg version of Ethereum co-founder Vitalik Buterin performs a calculation and spits out a randomly generated number. If your number is greater than the one generated you’ve won that round in Ether.
Proponents of Vdice and similar Dapps feel confident about the added safety measures they provide users through smart contracts on a decentralized network. With no main server to hack or ways for internal cheating to occur, bettors can play using Ether while remaining almost completely anonymous. Because Vdice owns itself and is not owned by a corporation or a casino owner, players possess better odds in their favor than in traditional gaming models.
The advancement of Ethereum gambling is exciting to players and devs alike but it also poses important questions around the legality of blockchain gambling. For years, web 2.0 gambling was plagued with fraud and scandal equating to a small community of merely 5% of the 100 million + players worldwide. With Ethereum-built Dapps stepping into this multi-billion dollar industry, the question on our minds is whether or not those same governing entities that eroded away the online gambling community, will do the same to platforms built on Ethereum. With no one to prosecute (in theory) in this border-free ecosystem, how can states prosecute new gambling operations the way they do brick-and-mortar casinos?
Programmer and attorney, Aaron Wright, discusses this topic in a new book set to release in 2017. In a recent interview he describes the phenomena of Lex Cryptographia, a set of rules that govern a system that once deployed in a blockchain is difficult to change. This protocol follows the rules determined by the smart contract layer of the Dapp but has little regard to local jurisdiction, essentially making them illegal. As interest in blockchain gambling grows, the question of how authorities can hold Dapps accountable is unknown to Wright and the blockchain community. Simply put, we need to let this play out in order to determine how regulators will challenge Ethereum gambling, if at all possible.
For now, Vdice’s success is a small victory nonetheless. The company which proclaims to become the ‘wordpress of online gambling’ is basking in its successful crowdfund of its Vslice tokens which can be purchased with ETH and other popular virtual currencies. Just how lucky they will be in the next coming months is still anyone’s wager.
Those interested in investing in vDice can do so right now on the platform’s ICO page.