How it links to blockchain and how it makes online gambling better
Smart contracts are appearing more than ever, so it makes sense for you to know just how straightforward and beneficial they can be. Read on to find out everything you need to know about their background, growing popularity and how they are a natural fit for online gambling.
What exactly is a smart contract and how long have they been around?
First thing’s first. What exactly are smart contracts? Quite simply, they are lines of code that are stored on a blockchain and are self-executing when predetermined terms and conditions are met. That means contracts can automatically occur without the need for outside interference.
They were originally created in 1994 by cryptographer and legal scholar Nick Szabo, who wanted the “highly evolved” legal contracts system to be used for a faster and more secure way to do business in digital currency. The rapid growth and continued success of blockchain has meant smart contracts are more prominent than ever.
What is the difference between a regular contract and a smart contract?
The difference between a regular contract and a smart contract is not in the contract itself, but in the administration of the contract. While there are numerous benefits to a smart contract over its traditional form, the main ones are speed, efficiency and security. With a regular contract, there would most likely be a credit check, various administrative forms to fill out and interactions with different people who would add to your fees and commissions.
With a smart contract the process is far simpler. As your identity has already been stored on a blockchain, lenders can make a decision about credit a lot quicker. And you don’t have to worry about someone intervening, changing the deal or even cancelling it. Computer code is also more exact than the legalese that traditional contracts are written in.
Smart contracts without blockchain and other factors
Image by Blockgeeks
It is worth noting that smart contracts can exist without blockchain. However, perhaps more importantly, this would mean it would lose all the major benefits. As such, data could be changed, manipulated, moved or deleted, or even be unrecorded. As blockchain is a digital ledger in which transactions made in bitcoin or another cryptocurrency are recorded chronologically and publicly, it is clear why smart contracts are so popular.
However, there are several extra things to consider. Smart contracts work best when the terms of the contract are more straightforward, as automated agreements do not suit complicated terms open to interpretation. While hacking into smart contracts can happen, it is worth remembering that automated contracts are among the most secure items on the internet. Blockchain transaction records are encrypted, meaning each individual record is connected to previous and subsequent records on a distributed ledger, so the whole chain would need to be altered to change a single aspect.
As smart contracts can be entered into pseudonymously, it could be tricky as to who you want to resolve any issue with. That is why some contracts may consider adding an arbitration cause so as to cover that eventuality. The planning part is vital and any exceptions to any rules must be agreed upon in advance. Within a smart contract, there can be as many stipulations as the participants desire.
Smart contracts for business sectors, including online gambling
As well as the speed, cost-reduction, transparency and added security, there are further benefits to businesses. As companies are even more aware about the environment there does not need to be the mountain of papers as it is all done virtually. Smart contracts also record everything, meaning in the event of data loss it is all easily retrievable. Industries built upon long-standing rules and algorithms such as banking, insurance and healthcare would be a natural fit for smart contracts.
The advantages of smart contracts really do work well within the gambling industry too. And we know how to maximise it for your satisfaction. Unlike with regular casinos, you do not have to worry about the payment taking days to go through or winnings being withheld. And the scale of games in the betting sector merges well with smart contracts. Whether the bet is made for small or large amounts, a third party never needs to get involved. And on games where randomness is a big part of the appeal, such as a roulette or dice game, we use provably fair algorithms, a tool that verifies each roll result and guarantees to be fair.
We know how to fully maximise smart contracts within our business to make things quicker, safer, cheaper and more efficient and transparent for you. The more you trust us, the more you have to gain.