Manually betting through traditional bookmakers was a furtive and complicated affair. From that, online sportsbooks are a major step up. We have major platforms like betway with easy access and flexible betting options on all kinds of things. But another major side of betting is casinos. While sports betting may depend on real-world outcomes, online casino and betting are often simulated through in-game algorithms. Other overalls like jackpots and lucky draws also run on in-house management. So how can you be sure that they are honest? Furthermore, are you impervious to hackers?
These questions also similarly apply to sports betting sites. Site legitimacy and server security can vouch for some of it. But decentralized betting is the ultimate next step in truly giving you objective, unbiased betting. It aims to get rid of bookmakers and intermediaries eventually. Rather than relying on them, the idea is to have a gambling industry where bettors have more control, security, and privacy.
The Basic Idea Behind Decentralized Betting
So, what is decentralized betting? To put it very simply, a decentralized betting network means that there is no need for a central operator. Think, for example, the case of sports betting. Here, the operator(s) are the bookmakers. An ideal decentralized betting system would have zero bookmakers. That is possible mostly through blockchains. Blockchains are a P2P network and IT technology that has seen wide usage in fintech. It had its initial uptick of hype in 2016 and has become the holy grail of IT supply chains since. The motto, again, is to do away with the third-party mediator. Furthermore, that helps create a gambler-run ecosystem.
The best example is sports and e-sports betting exchanges. The biggest ones feature prediction markets – where you can bet on about everything, e.g., what will be the weather like? Or, who will win the Golden Globe best actor this year? Gamblers build their own markets, and other gamblers place wagers at available odds—all without interference from bookmakers and such.
How Does Decentralized Betting Help You?
We have talked about how the aim of decentralized betting is to throw more weight behind the end-user punter. To understand in what way, first take a look at how an average sportsbook goes about things. On a sportsbook, the bookmakers (whether people or machine learning, or a combination of both) do various things. Firstly, they analyze and set the odds. Secondly, they record bets put on said odds. Finally, they pay the winning bettors. To say that all of this is conducted by a faceless bookmaker raises many issues. Let alone lack of transparency, betting basically becomes an out-guessing match between you and the bookmaker.
Now let’s look at the actual numbers. Because of their services, the betting platform, i.e., bookmakers take some juice (also popularly known as ‘vig’) out of the deal. Granted, there is much competition among the dozens of betting platforms out there. So sportsbooks avoid fleecing their customers too blatantly. Nonetheless, the average sportsbook will still pull out 5% of the money that changes hands as juice (ramped up to 10% if you lose the bet, which most people do). On the other hand, a decentralized betting exchange would have no big-brother central authority like that. It is much like a local betting game between friends.
Imagine you and five other friends make a wager on the outcome of an ODI test series. Everyone puts money in the pot, and winners take the exact winning they are supposed to. No money goes missing. Decentralized betting would be this but on a large-scale nexus of gamblers. So they also would take very little vig – maybe something close to 1%. The difference between a 1% and 5% cut may not seem like much to a beginner punter. But it really adds up if you play regularly and/or win big.
Another big thing is you do not have to stop at bookmaker-imposed limits. In a decentralized betting exchange, the gambler becomes the oddsmaker. You create the odds you like, and other bettors can take the bet on your odds. Gamblers’ funds also find storage in global public wallets on the blockchain, and payouts completed with smart contracts.
Sadly, decentralized betting is only at the stage of infancy. It has not gone big yet. It will take some time for people to really adopt this idea. Plus, there are liquidity and potential token spike issues that need solving. The biggest problem, though, is the currently flourishing status quo. The betting industry currently sits on the way over $110 billion. So only time will tell if we can finally take the giant leap to the golden age of sports betting.
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Original source: https://creatives.jeetwin.com/2020/12/04/what-is-decentralized-betting-and-how-does-it-work/?utm_source=rss&utm_medium=rss&utm_campaign=what-is-decentralized-betting-and-how-does-it-work