How to Play at an Ethereum Casino

The casino industry has come a long way and thanks to the introduction of Ethereum gambling, a whole new world of possibilities has opened up. 

Like other cryptocurrencies, Ethereum’s token, Ether (ETH), can be used for making simple deposits and withdrawals. Thanks to Ethereum’s smart contract functionality, its potential extends far beyond that. 

In this guide, we will take a look into how ETH interacts with smart contract casinos. Read on and uncover the new possibilities that Ethereum casinos unravel in the world of gambling.

Before we get into the gist of Ethereum gambling, let’s take a look at a number of important Ethereum concepts that make ETH ideal for casino use.

Transactions

When we talk about Ethereum transactions, these can refer to simple payments, deposits and withdrawals. But they can also refer to commands that trigger functions inside an Ethereum smart contract.

Smart Contracts

As mentioned at the onset, Ethereum smart contracts are the central feature of Ethereum casinos. They make a significant difference in the sense that when playing at an ETH casino you do not interact with the casino. Rather, you interact with the smart contract. How does this work? In order to understand, let us take a closer look at what smart contracts are.

In the simplest sense, a smart contract is a piece of code that defines an if/then statement. This means that if Y takes place, then Z results. Basically, when a trigger event happens, the contract gets executed. The manner in which it gets executed is guided by the rules set out within the contract. 

While this might sound rather simple, it has a far-reaching effect in the blockchain setting. For instance, with such a code in place, there is no need for a middleman. Since a contract governs all operations, players do not require an intermediary to oversee transactions. 

This would translate to low operational costs, which would make it possible to have a lower house edge. It would also mean faster transaction processing as there is no third party involved in the process.

Another benefit is that it offers unparalleled transparency. All smart contract transactions take place on the Ethereum blockchain and are immutably recorded therein. Everyone in the network can access a copy of the distributed ledger. 

It is also possible for everyone to validate transactions, which takes provably fair to a new level. This eliminates the possibility of human interference, cheating and errors (deliberate or otherwise).

With such decentralization in casino platforms, players can play directly on the blockchain, enjoying 100% fair games and with the capacity to confirm randomness of results.

Block Times

Block time simply refers to the amount of time required to generate a new block on the blockchain. This is also referred to as mining, and all transactions must be mined prior to execution. Ethereum’s block time is considerably faster than bitcoin, approximately 15 seconds (Bitcoin takes 10 minutes).

This would seem to mean that a bet should take approximately 15 seconds. However, the reality is far different. We will find out more about that later in the article.

Security

Ethereum smart contracts live on the Ethereum blockchain, not on a casino’s servers. The Ethereum blockchain is a distributed ledger framework, accessible on thousands of computers around the world.

Once a user deploys a smart contract, it is immutably recorded on the blockchain. As such, it cannot be tampered with. And that is what makes Ethereum casinos so secure.

Now that we know the key components of the Ethereum blockchain for casino use, it is time to get into the thick of things. 

If you are a newbie, you may be wondering how to get started on an Ethereum casino. To find out, make sure to understand all the concepts below. 

Browser Wallets and Web3

What is Web3?

The first thing you need to get is a suitable Ethereum wallet. Since you will be using ETH tokens to make wagers, the best wallet in this case would be a browser wallet. A browser wallet is simply an online account for storing your crypto coins.

A Web3 Wallet refers to a self-custody wallet that offers access to the web as well as the use of decentralized applications. When using a self-custody wallet, you have full ownership. Essentially, a Web3 wallet is a browser on top of a regular self-custody wallet so as to enable you access to dApps.

MetaMask Browser Wallet

There are many types of Web3 wallets. One of the most popular ones is the MetaMask browser wallet. It is the brainchild of ConsenSys, a reputable player in the blockchain space.

It has a great user interface, a great track record in terms of security and plenty of handy features. In this case, it acts as an interface for your Web3 wallet. 

Some of the other wallets offering similar functionality include Cipher, Alpha and DEX Wallet among others.

How to Set up MetaMask

To set up MetaMask, follow these simple steps:

Step 1: Go to metamask.io to find the official Chrome extension. Click on the “Get Chrome Extension” link to get started.

Step 2: To install the MetaMask plugin, click ‘Add to Chrome’.

Once a popup opens asking you to confirm the choice to Add MetaMask, click ‘Add Extension’.

Step 3: Open a new tab and click ‘Get Started’.

Step 4: On the next screen, select ‘Create a Wallet’ and then click ‘I Agree’ to proceed.

Step 5: Next, create a password for your wallet, confirm it and click ‘Create’.

Step 6: Write down the ‘Secret Backup Phrase’ keeping in mind the reminders on your screen. Click ‘Next’ when done. Read through the tips on the page that appears and click ‘All done’ to proceed.

Your MetaMask wallet is now ready to use.

Placing a Bet

Now that you have a wallet for your ETH tokens, the next step is to learn how to place a bet. To illustrate how, consider an example from an Ethereum casino like Crypto Casino:

Step 1: Send ETH from your MetaMask wallet to your account on the casino. Use the address that shows in your casino account as the receiving address.

Step 2: Select the game that you want to wager on.

Step 3: Enter the amount of ETH you want to wager.

Step 4: Place the bet and wait for results.

As mentioned before, transactions on the Ethereum blockchain theoretically take 15 seconds to get confirmed and executed. However, in reality, interacting directly with the Ethereum blockchain is slow. While this may be fine for things such as sports betting, it is not good at all for betting on slots or dice. 

Fortunately though, technology is fast improving and Ethereum has already created a number of speed improvement technologies. Some of these are optimistic rollups and zero-knowledge rollups (zkRollups).

Optimistic Rollup

Optimistic Rollup refers to a layer 2 technology aimed at scaling Ethereum smart contracts as well as decentralized apps to speeds of 100 to 2,000 transactions per second (tps). One of its key advantages over other scaling solutions is that it offers the potential to reduce transaction costs.

It facilitates the use of Optimistic Virtual Machine (OVM) for implementing turing-complete smart contracts on layer 2. It essentially moves transactions off the Ethereum main chain (layer 1) to a layer 2 sidechain. The sidechain is, however, secured by layer 1.

The solution sacrifices speed and privacy but eliminates the complexity of introducing proofs, as is the case with the second solution.

zkRollup

Like the above solution, zkRollup too is a layer 2 scaling solution. But what sets the two apart is that the latter allows a single main chain transaction to validate multiple transactions on sidechains.

Rather than having each token transfer as a unique transaction, as it is at present, this solution combines hundreds of transactions into a single one. Unlike Optimistic Rollup, it generates a SNARK proof. Using this proof, one can refer to the transaction from the main chain.

Fate Channels

In the meantime, before the implementation of optimistic rollup and zkRollup, some casinos are already using other technologies to speed things up. For instance, FunFair and its group of casinos have implemented ‘State Channels’ using their ‘Fate Channel’ technology.

Though Fate Channels are a form of State Channels, FunFair explains that they are designed slightly differently. They generate random numbers in real-time and facilitate micropayments among other things.

Using this technology, casinos can support transactions without having to use the Ethereum blockchain. Therefore, there is no need to wait for transaction confirmation, except when opening and closing channels. This makes it a fast alternative to traditional approaches.

All in all, it is clear that with the implementation of the aforementioned speed improvements, Ethereum casinos have a shot at addressing their biggest weakness.

Playing at an Ethereum casino is fun and easy, and for anyone with experience betting with Bitcoin, the process is the same. The key difference comes when choosing to bet at a smart contract casino, one which operates on Web3 as described above. By harnessing the power of Web3, Ethereum casinos can offer greater transparency, trust and fairness to their players. However, this exciting new way to gamble is limited by scaling issues on the Ethereum blockchain. It may still be some time before smart contract gambling reaches a mainstream audience.