Bitcoin and the Future of the Distributed Autonomous CasinoNov 19, 2014

Distributed Autonomous Casino

Distributed Autonomous Casino

Gambling is fun, and that’s true in a broader sense than you might realize.  

The game of dice dates back at least six thousand years.  Finding random reward interesting seems to be inherent to the way brains work—pigeons will happily ‘gamble’ in Skinner boxes and many videogames exploit the same principles to keep players interested.  Gambling can be a lot of fun, and a lot of people derive a lot of joy from it.  The primary downside, for most users, is that it’s profitable for someone else—someone whose interests do not always align with those of gamblers.

Because gambling is profitable, casinos have an enormous perverse incentive to keep people playing long after they stop enjoying it.  Gambling addiction can be genuinely nasty, and casinos have a big incentive to encourage it.

In a lot of ways, online casinos are better about this than brick-and-mortar establishments since they have fewer tools at their disposal to keep people hooked.  An online casino can’t pump in additional oxygen or get you drunk to keep you playing.  That said, tricks like putting arbitrary limits on withdrawals (often tied to so-called ‘deposit bonuses’) and hounding former customers with promotions are clearly not in the best interest of consumers, but online gambling houses have an incentive to do it anyway.

Secure Multiparty Computation

The good news is that there may be a better way on the horizon.  A technology called ‘secure multiparty computation’ is being developed, and it allows computations to be run on a number of computers simultaneously while allowing them all to reach a consensus about the results in a cryptographically secure fashion.

One powerful way to do this is to integrate the technology with a cryptocurrency like Bitcoin or Ethereum, allowing the scripts to harness the enormous distributed power of the network.  One application of this technology is the ability to create ‘Distributed Autonomous Corporations’ that run on the block chain without human intervention, entering into contracts and making transactions autonomously.  It’s not a big jump to imagine applying this technology to gambling and into Bitcoin casino market.

Distributed Autonomous Casino

Imagine an open-source casino that operates on the block chain: it takes special transactions with meta-data (the odds you want to gamble at), rolls the dice for you based on some reliable source of entropy (say, the hash of all the transactions it receives during a given period), and then makes a transaction back if you win.

The casino is open-source, which means that you can trust it. You know how much of a margin it takes (just enough to pay its own operating costs and maintain a small bankroll to cover the spread), you know that it pays out accurately, and, because nobody owns it, it has no incentive to try to bully you into using it when you don’t want to.  That’s a guarantee that no for-profit casino can possibly compete with.

If sending meta-data and hoping you receive a transaction doesn’t sound very fun, remember that the front-end can be almost entirely divorced from the underlying game logic.  Most games of chance—stripped of the bells and whistles—amount to sampling a simple probability function, and open-source or commercial software can put any kind of interface on it that you want: front-end software can simulate Bitcoin dice, slot machines, roulette, card games, and any of the other staples of conventional gambling.

Real-World Application

In the long run, it seems likely that these sorts of distributed casinos are going to become the preferred way to play for responsible gamblers, and I (for one) am all for it.  It would be interesting and encouraging to play Bitcoin games on platforms that function on this type of technology, adding transparency and reliability to the provably fair system.

The casino is dead!  Long live the distributed autonomous casino!