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Valery Petrov: “Blockchain implementation into business is a difficult, but necessary process”
Blockchain brought gambling to a new level of development. Transparent game results, legal anonymity, high performance, and that is just the beginning.
A speaker at Russian Gaming Week, Vice President at the Russian Association of Cryptocurrency and Blockchain (RACIB) and Board Member of JSC FINAM Valery Petrov, are sharing his observations and experience of blockchain integration in gambling.
Interviewer: Russian Gaming Week (RGW)
Respondent: Valery Petrov (V. P.)
RGW: Valery, how can you describe the attitude of gambling representatives towards blockchain taking into account your observations?
V. P.: Unfortunately, Russian gambling representatives still have a lot of technology advantages to introduce in this industry. Notwithstanding, the West is actively leveraging blockchain in gambling.
Let’s take Edgeless, an Ethereum-based project, for example. It operates transparently within the legal framework and has a unique bankroll function. The thing is that blockchain-based gambling experience puts casino on the back burner, which cannot but tempt clients.
Hopefully, gambling business of our country is on the brink of blockchain integration. I believe that Russian representatives will adopt this practice in the nearest future.
RGW: At what stage is the implementation of blockchain into the gambling business now?
V. P.: In terms of particular technologies, I would like to emphasize on a bankroll function. Its role is to ensure that a casino always has sufficient liquidity for winning payoff.
Let’s return to the example of Edgeless. Owners of this token would be able to work this it through a smart contract that later can be used to back up casino operations. That is how we attain a transparent mechanism of cryptocurrency transfer from losers to winners. No fraud is possible. This function would boost player confidence and, as a result, the number of clients. In case the value of the operating capital grows, such a solution would become the world’s leader. Particularly, concerning online casino where confidence plays the key role in new clients attraction.
RGW: How did Russian players welcome blockchain tech in gambling?
V. P.: Their interest is growing. Let me repeat myself: due to transparency ensured by blockchain tech, confidence and game engagement are going up.
RGW: How did blockchain tech affect the betting market?
V. P.: Transparency of a betting pool has always been hotly debated. Meanwhile, blockchain technology helped prove fairness in this industry. So, today, a switch to the DLT would become one of the most important competitive advantages. Smart contracts and blockchain’s transparency are a Chinese wall in front of fraudsters, which is favorable to players, organizers, and the whole segment at all.
It’s crucial to consider particular cryptocurrency solutions that serve an underlying element for a specific project. For instance, football betting operator Cryptocup uses ERC721 tokens. To compare, let’s take Ether’s ERC20, another famous standard in the ICO realm. The principal difference of ERC721 standard tokens lies in their non-interchangeability and indivisibility.
In other words, one cannot send 0.5 ERC721 token, but the transfer of a half or a quarter of ERC20 token is pretty possible. So, we can effectively use it to solve betting tasks and ensure transparency of payments and all the history of transactions.
In this way, blockchain-based solutions give rise to user confidence. They, in turn, boost gambling capacity previously unavailable to clients.
RGW: What cryptocurrency is the most frequently used in gambling?
V. P.: I would put Bitcoin and Ether first. They possess the highest liquidity level in the gambling realm ensuring fast and anonymous payments between users.
However, other altcoins and tokens issued for a particular project are also frequently used.
On the whole, gamers should know that token’s reliability is defined by the possibility of its conversion to Bitcoin, Ether, and fiat in the future.
RGW: Which problem can enthusiasts face when they integrate blockchain in the gambling business?
V. P.: The process of integrating new systems is hindered by the legal uncertainty in the field of cryptocurrencies. Blockchain technology by itself does not require additional regulation, which is why it is developing very dynamically. This is the reason why one should factor in cryptocurrencies in the context of practical implementation. To be more accurate, how widely they are planned to be used in a definite jurisdiction. For this reason, Switzerland often becomes a country for legal registration of cryptocurrency projects in Europe.
The cryptocurrency world lives according to its own rules that usually do not correspond with the legislation. From the legal perspective, Bitcoin is legalized only in Japan and Germany, and cryptocurrency users from other countries are in the grey zone of legal responsibility.
There is no uncertainty with the implementation of blockchain. Its usage is completely legal, as it is just a distributed ledger technology. Blockchain can be applied in business as a system. And it should be. Over the last 3 years, transaction speed has increased significantly and that’s only the beginning.
That is why entrepreneurs need to assess needs of their projects in practice and correlate them with the legislative framework of the country. For instance, there are many blockchain-based projects in Russia, but the law does not protect cryptocurrency users. However, the practice shows that successful solutions are already functional. The Russian Association of Cryptocurrency and Blockchain will help to understand nuances.
RGW: Please name three advantages of blockchain application in the gambling business.
V. P.: The first one is the increase of gamblers’ confidence in casinos, as it will be impossible to falsify the outcome. This will result in the growth of customer base and the reduction of marketing expenses, which allows to make a step towards clients and decrease fees, enhancing your own competitive ability.
The second advantage is the application of smart contracts increasing the efficiency and transparency of transactions. Besides, a casino token is used for reciprocal payments. Therefore, deposits and withdrawals are conducted immediately.
The key advantage is the potential of blockchain for the industry in whole. It is not the first year that one has been discussing an idea of creating a unified coin that will allow to pay for services in any casinos. Such an introduction will improve the liquidity of gaming tokens and allow to use an e-currency not only for in-game payments, but also for investment purposes.
RGW: What is your impression of the conference in general?
V. P.: I was pleasantly surprised to see such a great amount of blockchain followers at Russian Gaming Week. I’m glad that people keep reaching out for new technologies, knowledge, and solutions even in crisis conditions.
Special thanks to the event organizer, Smile-Expo, and RACIB (Russian Association of Cryptocurrency and Blockchain) for providing an opportunity to speak at the conference.
I believe that blockchain will be integrated to encourage not only the development of gambling business, but also the growth of the Russian Federation in general, because the potential of casinos and betting as conscientious taxpayers is pretty huge.
You can find more interviews with speakers of Russian Gaming Week 2018 on the event website.