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November 03, 2023, 07:56:51 PM |
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At first glance, gambling transactions are tailor-made for cryptocurrencies and blockchain technology. A deeper dive, though, reveals that there are barriers to sportsbooks and online casinos transitioning from Web2 to Web3. See below for why most online casinos and sportsbooks have yet to utilize blockchain tech.
All You Must Know Regarding Gambling Transactions and Cryptocurrency
Gas fees are what’s holding up sportsbooks from going from Web2 to Web3
When you currently fund your sports betting with BTC or ETH, bitcoin or Ethereum, you are funding into a Web 2 account. The source of your funds, the cryptocurrency you are using, rests on a blockchain, but you don’t put your BTC onto an actual chain.
The sportsbook that accepts your BTC deposit is on Web2 technology. The reason that no online sportsbooks or online casinos have yet switched to Web3 is due to gas fees.
Gas fees are the fees you pay to facilitate a transaction on a blockchain. The more congested the network, the longer it takes for a transaction to go through and the more we’ll likely pay in gas fees.
Ethereum is a prime example of this. Ethereum works off a proof of stake model where validators create new blocks of transactions. For doing so, validators receive a reward.
The reward is gas fees. Sometimes, depending on how congested the Ethereum Network has become, gas fees can go up to $100 per transaction. No sportsbook or online casino can pay for the gas fees, and it’s impossible to pass on gas fees to customers.
Transaction fees on Ethereum are expensive and Solana has security issues
Ethereum appears perfect for blockchain sportsbooks and online casino developments. But the gas fees on Ethereum are unpredictable. It’s tough to run an online casino when you’re not sure how much you, or your customers, must pay in gas fees depending on how many other transactions are going through the network.
Solana’s gas fees are low, but Solana has reliability issues. Solana has had trouble pretty much since Day 1. Numerous outages, a hack that resulted in the loss of approximately $8 billion, and SEC Chairman Gary Gensler naming Solana in a suit against Coinbase have led to crypto investors cashing out and validators moving to other chains.
Right now, it isn’t easy to know Solana’s future. So neither Ethereum nor Solana seems like a solution for online casino and sports betting.
PraSaga is working on a blockchain that might be perfect for online casinos and sportsbooks
There may be hope for Web2 sportsbooks and casinos that wish to move to Web3. PraSaga is working on an object model-based blockchain, called SagaChain, that runs what the organization calls Smart Assets in parallel.
Per PraSaga, they can create 40,000 blocks in the time it takes to create a single Ethereum block. Not only that, but unlike Solana’s model, Proof of History which uses hashtags to create a fingerprint for a unique set of data, SagaChain creates a unique ID for every smart asset.
You and only you have access to this unique ID, which makes whatever the unique ID represents safe and secure.
How sportsbooks and online casinos would run on SagaChain
Sportsbooks and online casinos could generate a unique ID for every single bet or transaction on the network. Sportsbooks could then provide access to the transactions to the customer who made the transaction and only that customer.
If this were to happen, casino players, sports bettors, and gambling operators could, in theory, end sports betting and casino gambling fraud, which has been one of the main reasons only some states have opened their doors to legalized sports betting.
Another selling point? Anonymity. Online casino players and sports handicappers would know that they are truly anonymous.
Where to Bet with Crypto
Sports betting odds are available here at Nitrobetting. Create a Nitrobetting account now to place your stakes on any of the top games every week.
This is just one of the many sports betting guides that you can read here at Nitrobetting news. Stay tuned for more previews, guides, and articles.
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