Pegged Sidechains Can Innovate Gambling Models for Bitcoin Casinos
Pegged sidechains are a key advancement to blockchain technology. They are an enabler for a whole new range of distributed applications. The technology will undoubtedly create enormous markets and disrupt a number of industries. In fact, one of the best applications that can use sidechains will be in the online gambling industry.
Online gambling, which is merged mine and offers chips to miners, will augment many of the gambling models today. Take online Bitcoin blackjack. Imagine that the dealer is an autonomous program run by miners. The hands, the stands, the hits, the doubles, the splits, are all processed by miners.
In exchange for facilitating the game, the miners are rewarded chips from the “casino” or the site. In a sense, the miners become the dealer. Therefore, players can tip the miners for facilitating a win. The miners, on the otherhand, can take their chips or ‘casinocoin’ and cash out back to Bitcoin when they are ready. They could also gamble their mining earnings in the next hand.
By pegging and merge mining the transactions or the bets between players and the Bitcoin casino, the miner is incentivized for devoting their ASIC hashing power. The miner is rewarded in proportion to how many hands it is able to facilitate. After all, the more hashrate is devoted, the more hands processing and more casinocoin will be rewarded, thereby increasing the number of miners, the hashrate, and ultimately the security of the game at hand.
A sportsbook can be another game or set of games that miners can facilitate. A Bitcoin bookie can accept bitcoins in exchange for ‘bookiecoin’, a pegged sidechain and altcoin that records bets into a ledger in the form of a smart contract.
Take a 3-game parlay for example. A player buys bookiecoin with Bitcoin and puts X amount on a 3-basketball game parlay. The smart contract is set that if Team A, Team B, and Team C all win, the amount of bookiecoin will be paid out to the players address. If one of the team loses, the contract executes that the funds are sent to the bookie’s address. When the bet is placed, the funds are frozen in the sidechain and the bet is recorded into the unchangeable ledger. The funds are either sent to the Bitcoin sports betting site or won by the player based upon the outcomes of the games.
So what is the incentive for miners? Miners that are mining bookiecoin, or recording sports bets into the ledger, are rewarded with bookiecoin that they can use to place bets or cash out to Bitcoin. Similar to the Bitcoin blackjack game, the more bets that the miners are recording into the sidechain, the more bookiecoin they will be rewarded.
Bitcoin games like blackjack and other gambling services like sports betting are just two examples where sidechains could be used to record bets into an unalterable ledger. There really are an unlimited number of online betting applications that will rise from the merge mining of gambling smart contracts. This incentivized mechanism to record and process bets will ultimately bring miners and players to the table.