Decentralized Protocols Are Making It Easier Than Ever to Gamble With Cryptocurrency

Americans wagered $140 million on the 2017 Super Bowl, but if sports betting was legal nationwide, that figure would have been closer to $5 billion, it’s believed. Save for a handful of states such as Nevada, sports betting is outlawed in the U.S., though a Supreme Court ruling last year looks set to change that. In the meantime, decentralized protocols are making it easier than ever for cryptocurrency users to bet on a range of events including the Super Bowl.

Also read: New Hampshire House Subcommittee Approves Bitcoin for Taxes Bill

Bitcoin and Betting

After drugs, gambling is the vice most commonly associated with cryptocurrencies. While bitcoin has a wealth of applications, it is no coincidence that bitcoin’s first “killer app” was hi-lo betting site Satoshi Dice. Because of its statelessness, suitability for cross-border transfers, and pseudonymity, cryptocurrency is a natural fit for online casinos. Many web-based sportsbooks and casinos accept digital assets such as BTC, BCH, ETH, and DASH, and there are dozens of platforms that exclusively accept cryptocurrency.

The size of the black market for sports betting in the U.S. is difficult to estimate, but is believed to be worth upwards of $80 billion a year. For U.S. bettors seeking a means to wager on their favorite sports, various offshore gambling sites will take their custom. Using a credit card for such purposes heightens the risk of detection and data-loss however. Cryptocurrencies can mitigate some of those risks, but customers are still obliged to sign up to a centralized online sportsbook and disclose their personal information.

Decentralized prediction markets are an alternative solution that is beginning to gain traction. While not ostensibly designed for gambling, they effectively serve as surrogate sportsbooks, enabling cryptocurrency users to wager on the outcome of major sporting events.

Prediction Markets and Decentralized Sportsbooks

A string of supposedly decentralized sports betting sites has sprung up over the last 18 months, many of which were funded with ICO money at the peak of the bubble. Projects such as Wagerr will soon be joined by the likes of Block Sports, while the popularity of gambling dapps, which account for the majority of dapp usage on the Eos and Tron blockchains, attests to the lure of crypto-based betting. Decentralized prediction market Augur and the platforms built upon its protocol are the best known examples of borderless betting that’s virtually impossible to censor.

At the time of writing, 330 ETH have been staked on Augur for the question “Will the Patriots defeat the Rams?” 54.6 percent of participants have the Patriots triumphing in the 2019 Super Bowl.

First Augur UX that feels mainstream-y Will the Patriots beat the Rams? Yes makes 1.64x your money

No makes 2.11x your money If your wrong you lose your bet Pretty simple (Just needs a stablecoin) pic.twitter.com/rGg0BizU7T — Ryan Sean Adams (@RyanSAdams) February 1, 2019

Guesser, a more user-friendly version of Augur, is currently in closed beta. It enables anyone to wager with ETH in just a few clicks using the Metamask browser. Its Super Bowl market is also seeing action, though more serious sports bettors may prefer Veil. Yet another Augur-based derivative, it offers the ability to go long or short on the outcome of the Super Bowl as well as to wager on a host of other events including the Academy Awards.

For cryptocurrency users accustomed to using browser wallets such as Metamask to access the decentralized web, the ability to discreetly gamble in a couple of clicks can be tempting. Without the safeguards that licensed betting platforms offer, including the option to self-exclude to prevent problem gambling, the convenience of decentralized prediction markets calls for self-control. With great financial freedom comes great responsibility.

What are your thoughts on decentralized gambling platforms? Let us know in the comments section below.

Images courtesy of Shutterstock, Augur, Veil, and Guesser.

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