Blockchain in the Entertainment Niche: the Main Perspectives

Thanks to the technology’s enormous potential, iGaming brands can become market leaders.

Brief Information On the Concept

It is a method of tracking transfers through a global open registry. Such operations may contain something of value (such as intellectual property or useful contacts), but most often, they involve cryptocurrency.

The phenomenon refers to the process of adding new transactions to an existing digital chain. It consists of billions of blocks, and each of them has data about already completed and planned settlements (it is securely encrypted using cryptography).

Each digital unit has its protocol: SHA-256 for Bitcoin, Scrypt for Ethereum, etc. It is possible to view the info, but it cannot be edited or deleted. As a result, the blockchain remains unchanged and is not subject to external threat. That determines its high importance for the whole world.

A distributed ledger is beneficial to many industries. These are healthcare, pharmaceuticals, construction, finance, banking, retail, real estate, marketing, contemporary art and, of course, gambling.

According to a Harvard Business Review Survey:

38%

38% of companies, mainly from the USA and Europe, use blockchain to scale their business

44%

44% of respondents said they are going to implement the option in the next 3 years

18%

18% of people reported that they do not yet plan to use the solution

The IDC IT corporation predicts that in 2024, global spending on data transfer in the blockchain environment will reach $19 billion.

$19 billion 2024

By 2031, it will generate $3.1 trillion in revenue and manage 20% of the international economic infrastructure.

$3,1 trillion 2031

Benefits of Technology

Today, the solution is changing the business landscape in many sectors. The iGaming and sportsbook sphere is no exception.

Research shows that in 2023, the number of cryptocurrency bets doubled and reached $6.3 billion. The volume of investments in portals that accept these tokens is also growing. Even those brands that are not yet ready to completely switch to blockchain are actively adding this settlement method for fast and secure payments.

Why it is a good idea to use technology in the gambling sphere:

1. Decentralised work. The solution's architecture reduces the need for the participation of intermediaries in the data transfer process (these are financial services, banks, regulators, and other entities related to the casino niche). Operators can conduct autonomous activities that do not depend on external factors and the decisions of third parties.
2. Complete safety. Blockchain is based on cryptography algorithms, which significantly increase the protection of iGaming sites. Entrepreneurs may not be afraid of system failures, hacker attacks, theft of bonuses or confidential data, as well as code obfuscation and other fraudulent activities.
3. High performance. This includes the transfer of funds between the wallets of operators and their clients, the launch of sessions, the determination of results, etc. The total absence of intermediaries increases the speed of transactions and reduces their costs.
4. Scalability. Working in such an environment is simple and as comfortable as possible. Business owners can quickly enter the international market using distributed ledger architecture. To attract online traffic from abroad, there is no need to get any approvals or the regulator’s permission.
5. Diversity. Today, entrepreneurs use various digital units (from BTC to TRN), DeFi applications, and NFTs. Operators have a choice and every opportunity to launch original and profitable startups.

How the Technology Is Used in the Niche

Let us consider the main options for applying the solution.

Cryptocurrency

This is the most understandable and time-tested way to implement blockchain in a virtual casino. Today, payments in digital assets are quite popular and are trusted by both players and project owners.

The users’ habits remain unchanged:

76,5%

of gamblers prefer BTC

8,4%

place bets in ETH

5,1%

use LTC

5%

choose USDT

3%

trust DOGE

There are 2 ways to introduce cryptocurrency into an entertainment platform:

• carrying out only blockchain transfers;
• use of virtual tokens together with popular fiat currencies (US dollars, euros, and pounds sterling).

The second option seems preferable since it allows entrepreneurs to attract new solvent traffic that consists of millennials and not lose regular customers. It is also possible to track the players’ activity over time and evaluate which digital assets are more in demand among the target audience.

Reasons why gamblers choose cryptocurrency transactions:

1. Wide range of bets. Blockchain supports sessions on micro and macro limits. During one spin, people can place a bid of 0.0000, 1 BTC, or even more. Much depends on the gambler’s user habits, gaming strategy, and desire to win.
2. Minimum commission. A standard bank transfer costs about 5 or 6% of the total amount. Electronic payment services charge less (2 or 3%). However, if a client frequently replenishes their casino account and withdraws money, then a huge amount of commission deductions accumulates over the month. Cryptocurrency settlements have no additional costs. On many blockchain iGaming platforms, there are no fees for transferring money at all.
3. Complete anonymity. To make a deposit, players do not need to disclose their private pieces of data, enter bank card details, or confirm the geolocation. Anonymous placement of bets from anywhere in the world attracts a wide audience.

Game Development

The technology is actively used in the creation of such content as card entertainment, slots, multiplayer fishing, etc.

The industry even has a new type of offering: crash solutions. They interest users thanks to continuous gameplay, support for blockchain operations, and social tools.

The BGaming Maltese provider is one of the pioneers in the field of developing products based on the concept. The company has several iconic releases: Minesweeper XY, Space XY, Plinko XY, and many others.

Their main characteristics are:

• original gaming process;
• multi-user mode;
• original bonus features.

Acceptance of bets and payment of prizes is carried out in cryptocurrency.

The Spribe Ukrainian company is another popular provider of crash entertainment. The manufacturer's calling card is the Aviator. This is a dynamic solution with effective interaction tools, huge multipliers, and an intuitive interface.

The Provably Fair function is what almost all blockchain games have in common. The technology is based on cryptography. It confirms that a virtual casino acts transparently and guarantees honest outcomes for each round. Anyone can double-check the results and verify the platform’s integrity.

The Future of the Concept in the iGaming Sector

Let us consider the prospects for introducing a distributed ledger option into the casino and betting sector in the coming years.

Creation of New Types of Entertainment

The Crypto.com online publication states that the size of this market has reached $3 billion by the end of 2023. Experts predict that by 2030, the figure will increase by 65–90%.

The main growth indicators are:

Active Funding for the Game Development

The largest volume of investments in such technology is accounted for by the Asia-Pacific region (almost 40% of all cash infusion). Next come North America and Europe.

The high interest in the Asian market can be explained by the fact that locals like blockchain options, as well as by the active spread of cryptocurrency. In most countries (for example, China or Japan), traditional online games (slots, cards, and roulette) are prohibited, so people are focused on content where they can use digital money.

Alignment of Innovative Business Models

In the case of blockchain products, methods that are similar to traditional gambling options are used:

• monetisation through NFT;
• “Play To Earn” (P2E);
• “Play To Own” (P2O).

Most solutions are based on the web3 concept. These are decentralised and completely autonomous applications for placing bets online. They belong to the Internet community in general and not to any specific corporation.

Currently, P2E games dominate the market, with a total value of $107 million as of 2023. The number of average daily unique active wallets (UAW) is more than 787 thousand.

$107 million 2023

By 2030, the sector's revenue will reach $73 billion, and $38 billion of this sum will be generated through casino entertainment.

$73 billion 2030

Introduction of NFTs

Today, they are used as a means of the game. These are artefacts, access levels, weapons, clothing of the main characters, and other elements.

Most experts associate the future of blockchain with NFTs, although so far, their use in the niche raises some questions. For example, platforms that accept them are often criticised due to weak KYC verification of customers.

Many iGaming resources are introducing non-fungible tokens into their loyalty programs. Whenever a player reaches a new VIP level, they receive a reward in the form of a more valuable NFT. It can be used to access exclusive amusements and rounds, participate in branded tournaments or jackpot sessions, and much more.

Evolution Gaming is one of the first companies to add NFTs to its bonus offer. It is possible to get 1 of 4 unique coins from the CryptoPunk collection by placing bets in the NFT Megaways slot machine.

Legalisation Aspects

Most experts associate the future of digital currencies with their regulation. So far, only a few jurisdictions have approved the work of crypto casinos and the creation of blockchain-based products. Other states are still on the way to legalising the industry.

The Isle of Man is the most progressive country in this matter. Back in 2017, the local regulator allowed the deposition and withdrawal of funds in digital currency, and in 2019, it launched voluntary licensing for the vendors of specialised software.

The Isle of Man Blockchain Office and Sandbox department is engaged in the sector’s growth.

Malta, Estonia, Latvia, Curacao, and other jurisdictions are favourable to crypto casinos. The industry’s future will largely depend on how quickly the leading economies are going to legalise it.

The Main Things about the Use of the Concept in Gambling

Let us consider the key characteristics of distributed ledger technology:

• It represents a continuous online chain of billions of interconnected blocks. They store information about already performed and planned operations. Data can be viewed and transferred to third parties, but it is impossible to change or delete it.
• The advantages of the product include a decentralised structure and complete security. Gambling projects based on such technology can boast of high performance and scalability.
• Game development and cryptocurrency settlements are the main ways of using blockchain in gambling. Operators can launch casinos that accept digital assets or create a hybrid version that allows players to use fiat money as well.
• Technology’s future is associated with the release of new types of entertainment and the introduction of NFTs. The capitalisation of the niche will also depend on the legalisation of this kind of payment in countries with developed economies.

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