Announcing our partnership with The Bitcoin Strip!
In recent months, the team here at the Crypto Gambling Foundation (CGF) have been working tirelessly behind the scenes to improve operator standards, whilst developing our brand and expanding our reach throughout the industry. With the main goal to revolutionise the implementation of provable fairness and its importance in the gambling industry, we are constantly looking for others that share the same ideals to assist in achieving our vision.
A product that has drawn our attention in recent times has been The Bitcoin Strip. Their dedication to ensuring a strategy similar to ours meant it was a no-brainer for both parties to join a partnership.
Whilst in early stages, I took the time to sit down with the owner of our newest partner, Nick, to discuss a few passionate topics that I'm sure a lot of our readers and stakeholders would love to hear about.
Whats the story behind the Bitcoin strip?
I started out playing online poker back in 2006 when the industry was going through massive growth. I sat at the tables for 10 to 12 hours a day and ended up playing professionally for several years. That all changed in 2011 when the industry took a major hit during "Black Friday" – an enormous crackdown on online poker sites by the US Government that led to the player base shrinking enormously.
Coincidentally, this came at a time when Bitcoin was beginning to get some attention. I saw an opportunity for players to side-step the regulators to play with what was essentially considered "play money" at the time. Bitcoin poker sites like SealsWithClubs were beginning to see regular activity – a hint at what was to come for the Bitcoin gambling industry.
In light of this, I decided to begin my journey in the Bitcoin gambling affiliate space. Having had affiliate experience in the traditional poker and casino industry before, I felt this was the natural next step – and one to take before the rest of the industry caught on.
So The Bitcoin Strip is the culmination of this journey, seeing itself reiterated on and rebranded a number of times. It's crazy to think how serious this industry has become thinking back to those Bitcoin "play money" days of 2011.
How long have you been around for and what have you learn the most from this project?
There are a few things I've taken away from my time in this space, the first being that Bitcoin is king. Over the years, many other cryptocurrencies have claimed to be pulling in enormous betting volumes. I remember when EOS dice sites were posting revenues in the hundreds of millions. The reality is that these numbers are wildly exaggerated thanks to the low cost of faking volume on these blockchains. Our data shows that there is very little appetite for most of these altcoins when it comes to gambling.
It's also very clear that cryptocurrency gamblers are not like traditional gamblers. They tend to be younger, more tech-savvy and far more interested in a good user experience - anonymity is also key. Compare top Bitcoin betting sites like Stake with the likes of Bet365 or 888 and it's obvious we're talking about two very different markets.
What are some things we should be keeping an eye on the horizon for?
Smart contract gambling on Ethereum is going to be a big deal. Depositing and withdrawing with Bitcoin is one thing but being able to trustlessly bet without a middleman is going to be a game changer.
The reason this hasn't taken off yet is that each bet requires a block confirmation (15 seconds on Ethereum). There are a number of platforms that have tried to circumvent this through "state channels", but this reintroduces trust assumptions that defeat much of the point in decentralized gambling.
Going further, it's likely that Bitcoin gamblers will be able to take advantage of this with the introduction of low-trust ETH-BTC bridges like what we're seeing with tBTC. This will allow gamblers to essentially bet Bitcoin using highly secure Ethereum smart contracts and without ever losing custody of their funds to a third party.
Finally, there are stablecoins. I'm surprised by just how little up-take there is for stablecoin gambling by the operators and players in this space. USDT has had some integration, although what's needed is the inclusion of decentralized stablecoins like DAI, whose transactions are censorship resistant and whose value is – I'd argue – more secure.
Gambling Bitcoin is great, but betting with non-volatile crypto definitely has its place.
Where do you see things in the crypto space in the next decade?
If we're being really ambitious I see Central Bank Cryptocurrencies being issued and a blurring of the lines between Fiat and Crypto gambling. Government-regulated casinos will accept cryptocurrencies in the form of digital dollars, euros and pounds, with KYC deposits of Bitcoin and other public cryptocurrencies.
I also imagine we'll have a vibrant space of smart contract casinos with Ethereum dominating this sector. This will be thanks to the widespread adoption of web3 browsing from the likes of Chrome and Firefox, as well as native crypto-wallets built into Samsung, Pixel and iPhones. The ability to interact with blockchain-based gambling apps will be seamless and the functionality will be mind bending in today's terms.
Removing trust from the gambling system will unlock incredible new ideas that we can't even imagine today – similar to how the decentralized finance space is opening up entirely new concepts previously not thought of.
Who do you consider to be the biggest and most influential role models in the crypto gambling industry?
From operators and regulators all the way through to affiliates and players, there are a lot of people doing their part to ensure cryptocurrency gambling becomes a safer and more transparent market than traditional betting.
On the operator side, Stake is doing all the right things for their players and the industry. On top of their license from Curacao, the platform goes a long way to self-regulate and as a result have demonstrated what Bitcoin casinos are capable of.
On the Ethereum side, FunFair is demonstrating what can be done with smart contracts as a means to transparently resolve the trust issues that have previously plagued this space. The improvements in Ethereum technology over the coming years will hopefully give FunFair more space to shine.
While the CGF do not act as a regulator, they do provide some much needed integrity for this space. Their role in evaluating and certifying cryptocurrency casinos will prove evermore valuable as the industry grows.
In what way (if any) does provable fairness have an influence on operator reviews and rankings on your site?
Provable fairness (with an open source method of verifying bets), is one of the most important factors for us. With Bitcoin gambling, we see no reason why a casino cannot implement such a basic trust verification tool and expect to see more operators adding this feature in due course.
Do you get many queries from viewers regarding operator fairness and their provable fairness implementations?
I think the most telling thing is that we don't hear any complaints from players using casinos with provable fairness. In an industry that currently operates in a low-regulation environment, it's unsurprising that many players are suspicious of bad beats from platforms that have no way of verifying fairness.
The complaints we do receive are near-exclusively from traditional-styled casinos that have "tagged on" Bitcoin deposits and withdrawals with the same low level of opaqueness you might expect.
What would you like to see from/or help influence with this partnership with the CGF?
It's clear that the industry is in need of an organisation like the CGF. We're hoping that by including and making clear who our CGF-verified partners are, we'll be able to provide a much safer experience for our players.
Through our partnership, we are keen to help establish a globally recognized certificate of trust that can be applied to operators who adopt the highest standards of transparency and fairness.
The Art of Generating Random Data
When it comes to playing a game involving even the smallest extent of luck, the task of generating random data is crucial. A biased algorithm may not only kill the excitement of players, but cost them their own stake.
Random number generators determine the result of such games. In the gambling sphere, the importance of their fairness is unquestionable.
Hosts should aim to provide their players a transparent and unbiased random number generator.
- Transparency can be achieved by publishing the algorithm used for generating random data. In order to prevent malicious behaviour, algorithmic determinism is necessary. Black box functions (including true random generators) violate these constraints, so they are ineligible for this purpose.
- Bias can be avoided by using random seeds to initialise a so-called pseudo-random number generator (PRNG). Contrary to a true random number generator, PRNGs solely depend on the seed given to them.
- Data generated by PRNGs are verifiable by nature given the seed and the PRNG function itself. Verified casinos only need to compute the PRNG's outputs and compare them with the host-computed results.
Seeding a game
Seed generation shall be distributed amongst players and hosts.
To avoid bias, no entity may know the seed of others during this process.
In most applications, seeds consist of two main parts:
- Host seed: Chosen at first and kept in secret until the end of a particular game.
- Public seed: Chosen by every player of a game. Multiple players may contribute to it by using a commitment scheme. Should be revealed after a commitment to the host seed has been made.
(If multiple players bet against each other, then every participant should also be a host. The aforementioned situation describes the problem of playing a mental poker game.)
Host seeds should be computationally infeasible to break. This can be achieved by making them large and using a reliable source of entropy for their generation (e.g. a true random number generator device). Besides that, using a long period PRNG is recommended.
Multiple betting rounds
Having to choose a new seed before each betting round is inconvenient. A predictable value called a nonce can transform a single public seed to an arbitrarily large set of seeds. A unique nonce should be appended to the public seed before each round.
The Significance of Commitment Schemes
Commitment schemes provide an indispensable building block of provably fair algorithms. They are used for storing information to be revealed later, similarly to how envelopes work.
Historically, letters were sealed to prevent message forgery. Attempting to remove an applied seal from its document would most certainly break it. Recipients could verify the invariability of a message by the presence of an intact seal.
Shifting from traditional letters to digital communication, where the demand for protecting information arose. Cryptographic primitives were established, resulting in the invention of digital signatures and commitment schemes.
A commitment is a message concealing a value chosen by the sender.
Commitments have the following properties in common:
- Hiding: The concealed value can only be known by the sender. (Recipients may verify the validity of a commitment once the sender reveals the chosen value.)
- Binding: Only the sender's chosen value may validate the commitment during the opening phase.
The aforementioned properties grant commitment schemes application in secure coin flipping and multi-party computation (MPC). For example, collision resistant cryptographic hash functions can be used as a commitment function.
In provably fair algorithms, commitment schemes are widely used for computing an unbiased common seed used for generating random numbers.
The Problem with a lack of Vigilance
Provable fairness allows users to play on sites without the fear of their bets being altered into the favour of the house. But there's an important caveat that is often missed or not explained to the players. Full trustfulness is only there if the player does what they need to do also. Nearly all provably fair systems operate on the server seed/client seed model. The server shows you a hash of their seed before you start betting, allowing you to change your client seed before the first bet of the round. This way, since you are introducing new data into the hash function, the outcome of the hash is no longer controlled by the site as they do not have control over the data you give them.
But here lies a problem. Many sites will fill that box for users when they change their seed. This in itself does not have to be a problem. In fact, it's possible for this to be even more secure than the user entering their own data. If the site allows you to enter up to 32 random characters and they auto-fill the client seed box with 32 actually random characters (preferably generated on the client side with JavaScript instead of by the server) then it's more secure than just entering "1234" as your seed, just like a password. (However it's only "more secure" if the site is malicious and trying to change outcomes, and such a site would probably not generate good seeds for you, making the point unnecessary).
The problem with pre-filling the client seed comes from a situation where the site is malicious, which we should assume until proven otherwise. A malicious site can easily generate a server seed and client seed ahead of time that will result in more losing bets than winning ones. It's just a matter of generating random client seeds and checking the results until they get one that's sufficiently "bad".
If this site were to present this bad seed to the user as a sort of default option, many people would click past it and not think about it. The site would still use all the same provably fair algorithms, but could still be cheating you. Such a thing would only be possible if the site thinks you are likely to keep betting high or keep betting low, because estimates for you winning rely on consistently betting one or the other. (If the site generated a seed pair that would make you lose 55% of the time if you bet high, but you chose to bet low instead, you would be winning 55% of the time instead of losing). However, if the site does not allow you to pick high or low (or the game is some game other than dice where the numbers affect the outcome in a different way) it this opens up a good attack vector for them.
The concern with this kind of attack on players is small, because it would be difficult for a site to pull off consistently, especially without eventually drawing attention. However, no small hole should be discounted, especially with technology becoming more prominent. If you take anything from reading this, always change your client seed to something that you created and copy down the hash of your server seed before you start betting.
Why should I care about provably fair?
When you stroll into a casino, approach the cash desk and leave with a handful of chips, you do so for one reason and one reason only. You have faith that you can leave the casino a winner. This faith comes from the belief you have that the outcome of the bets you are about to place will be random, thus giving you a completely fair chance of getting 'lucky'.
You walk to the roulette wheel and place your bets on the table in the sure knowledge that neither yourself nor the person spinning the roulette wheel has any influence over the outcome of the spin.
This is not always the case online. You find a site, complete your due diligence and make a deposit. You play and you lose, you play some more and lose some more, and eventually a thought crosses your mind… what if the site you are playing on is not fair?
How do you know that the casino you are playing at online is not simply generating any outcome that guarantees them a win?
The answer? Provable fairness. The newest and more up-to-date casinos are embracing ground-breaking technology to completely remove this doubt from players’ minds. To generate a random outcome, gaming sites utilise a seed and run this through an algorithm. A seed is simply a starting point to generate a random number. Then an algorithm is a series of steps taken to convert that seed into a pseudo-random result.
In a Provably Fair gaming environment, the site publishes to the player the seed they are using in advance of the game, however they do so using encryption, so that the player is only able to determine the seed after the game has taken place. In a Provably Fair game, the player also provides their own seed to the server which is used as part of the random number generation process.
Once the game has taken place the player can decipher the seed belonging to the casino to verify that the outcome of the game they have just played was completely fair. That is, the casino generated the most random result possible without unfairly influencing the outcome in their favour.
Simply put, Provably Fair gaming is the fairest way of gambling anywhere online in the world.
Which is why when you play at a Provably Fair gaming site, you know the money you wager is in safe hands.
What is Provably Fair Gaming?
Before we may begin to understand what makes a casino provably fair, we need to study how the basis of online gambling works. Simply put, players bet on the outcome of randomly generated numbers.
Formerly, these random numbers were generated solely by the host of a game, leaving complete control in the hands of operators. Participants had to trust the host not generating results in favor of anyone. Casinos operating on these merits caused conflict of interest for those seeking a fair gambling experience.
Due to lack of transparency, the essence of provably fair gaming was born. Corresponding concepts provide a way for both the operators and players to contribute to randomisation, which in turn removes any possibility of deception or cheating.
The foundation of fair gaming algorithms were laid by pseudorandom number generators, utilising seeds which determine the outcome of wagers.
A seed shall be equally influenced by players and hosts, meaning that the result of each bet at a provably fair casino is a team effort. The house is no longer in complete control of randomisation.
So, wouldn't this mean that players are able to manipulate results in their own favour?
Commitment Schemes
To prevent malicious behaviour, hosts must not show us their actual seed at first. Instead, they present a commitment of their own seed to us. Similarly to envelopes, these commitment schemes seal and conceal messages contained by them. They cannot be altered or revealed without consent from the sender. For example, hosts may commit a seed by using a one-way hash function or public key cryptography.
Hosts shall provide transparency and proof of authenticity by revealing their actual seeds at the end of each game. Anyone in possession of a host's commitment may verify the immutability of the corresponding seed.
Bets shall be reproducible once the host seed gets revealed. Players can constantly audit the behaviour of hosts by comparing random results calculated by a host and themselves.
Proving that the outcome of a wager is computed fairly and transparently should be performed by anyone at any time. We strongly believe in widespread use of provably fair algorithms throughout the gaming industry.
If you would like to learn more about the technical workings of provably fair algorithms, you can download my whitepaper found here.