How Decentralized Blockchain Betting Sites Verify Bets

Decentralized Betting Platforms

Decentralized Betting Sites

Today, developers are caught up in a frenzy creating loads of blockchain-powered platforms that will disrupt industries. Sectors such as transport, sports betting, and shipping will be changed forever. The technology will play a significant role in eliminating fraud and getting rid of third-parties. Crypto enthusiasts are often reminded that whenever external data gets involved, blockchain is left vulnerable. 

Blockchain Casinos

Blockchain tech works in tandem with Smart Contracts to conduct electronic transactions. Smart Contracts are lines of code created to self-execute when conditions set in place get met. With such tech in use, gamblers or casinos don’t have to trust each other, nor are they left to check or do anything. Players that win a bet get their wallets accredited automatically. Users get to sell tokenized crypto are rewarded with funds based on the current price. 

Decentralized betting platforms are made up of a network of computers that supply computing power to verify each transaction. As a reward for linking up their computer to the network, each user is rewarded a small percentage of crypto which is called “mining”. The best blockchains for betting are EOS, ETH and TRON as they enable smart contracts to run alongside the transaction so that they can self-execute code protocol to handle the whole process without any third-parties keeping it completely secure from manipulation.

The Oracle Quagmire

The question is, how do Smart Contracts know that a gambler has won a bet? Or what is the price of gold? Or how much electricity is consumed? The Smart Contract doesn’t know and doesn’t have the capacity to look-up external data by itself. 

For the above to be possible, Smart Contracts have to work together with oracles. An oracle can be defined as the mechanism that joins together real-world data into a blockchain-powered platform. Oracles can appear as metering devices, or API provided by the stock exchange. 

Oracles can also be cameras set up in the refrigerator to detect when a particular item runs low or out (such as eggs) and feeds the info on the blockchain-powered grocery shopping app. When blockchain tech is unleashed into the real world, it becomes necessary to partner the same with oracles. That said, oracles come with a vast loophole; they present a high-security risk. 

Blockchain tech has sealed and eliminated all loopholes by storing data in many computers in the same chain. Oracle, on the other hand, come in as external data points, and they create a gap since they can be hacked into. 

The Oracle Issue

In Betting and Gambling, oracles power all wagers and gambling activities. From dice rolls to football matches, anything wagered on is an event and punters require knowing the actual result of the event. Besides, there are zero respected oracles in the gambling world, Bloomberg is the world’s highest trusted oracle for stock exchanges. 

With such statistics, it goes to show that blockchain gambling projects should be specific that results fed into contracts are not only reliable but secure. Below, we go through several promising solutions that give different dimensions for solving the oracle problem. 

Augur Betting Predictions Marketplace

Augur is a sports and gambling platform that focuses on the kind of events in which oracle data sources exist. The project is developing an in-house AI network that will be in charge of processing all oracle data, thus revealing inconsistencies. The neural network has been developed to analyze past game data thus predicting the outcome of future events with a more than 70% accuracy. To find out more check out our Augur review online for a full breakdown of how it works.

Wagerr Decentralized Betting

The project suggests a second-tier network of oracle master-nodes, which will conclude into a consensus surrounding the outcome of every event. The oracle nodes have been designed to collect half of all block rewards. Any node that misbehaves gets excluded with immediate effect, and its rewards get lost. For further information read our Wagerr review online which gives a full breakdown of how everything works.

Younited Social Betting Platform

Younited is a social betting platform that makes users wager against themselves as opposed to wagering against the platform or a bookie. A decentralized voting system comes in handy in determining the event outcomes. It uses an approach which pits that human oracles are safer than automatic ones, so long as there is a chain of people taking part. You can find out the full details of this amazing new concept by reading our Younited review online.

Which is The Winning Model?

Will the winning model by a neural network that verifies oracle data and predicting future games as proposed by Augur? Will it is a consensus amongst several chosen nodes as offered by Wagerr, or will it be a vote held by all users as prompted by Younited? 

It is a race to become the leader in this new sector of decentralized crypto betting and the old guard are been left behind as its impossible for them to complete using a centralized model. Centralization requires a vast amount of money due to requiring third-party human involvement which is not the case with smart contract decentralized models. It is a huge competitive advantage that can be used to greater reward the participators.

For now, it’s hard to know which will be the winning model. However, if an oracle problem solution is found, it will most likely emanate from the gambling sector. Reason being, it’s the platform that’s getting all the attention from the cryptocurrency rage. It is a fast-paced industry and countless new developers are entering the space as they profit that the leading platform will make will be astronomical due to the size of the sector been worth billions each year.

Of all 20 popular Ethereum dApps, 10 of them are in the gambling and betting sector. Resolving the oracle issue is one of the most significant contributions that gambling projects are championing in the crypto industry. The remaining markets, such as insurance, renewable energy, transportation, tokenized commodities, etc.will soon follow suit. When we reach the critical point, then the blockchain revolution will be set in motion. 

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Daniel

Daniel Kay is a serial entrepreneur that has been traveling the world living off cryptocurrency for the last 6 years. He has a number of crypto related gambling review platforms along with regularly offers his expert blockchain advice on support and forums. He is the founder of Blockchain Casino Games and has a passion for all things crypto.