The sports betting industry is one of the most lucrative sectors in the world. In 2017, it was worth $45 billion, and surpassed $76 billion in 2021. Unfortunately, it’s also one of the most fragmented industries, with dozens of operators vying for market share.
That fragmentation has left many consumers feeling like they have no choice regarding finding the best odds on their favorite sports events. But what if I told you there was a way to improve online gambling?
To truly understand how this can improve the sports betting industry, we must first examine how transparency is already being provided. For example, three components of a betting platform could be made more transparent: the betting process, payout process, and audit trail.
The betting process is a big part of making online sportsbooks popular. It allows you to place bets on your favorite teams or athletes on your computer or mobile device (sometimes even on your TV). But what if they also allowed you to watch other people place bets? What if these other people were professionals?
If this sounds like an odd concept to you, think back to when you were growing up: did any adults ever teach you how stocks worked? Did they teach you how mortgages work? Did they ever explain how credit card companies determine interest rates for consumers? Of course not—these things are complex subjects requiring years of experience to really sink in.
Transparency for payouts – self-explanatory – and an audit trail cannot be overlooked. Blockchain technology and cryptocurrencies can offer much-needed improvements regarding these aspects. They will also help people avoid nefarious service providers.
The concept of provably fair odds is a feature of blockchain-based sports betting. It is a way to prove that the odds are not fixed in favor of one team. Instead, they’re calculated based on algorithms and can be verified by anyone.
The algorithm for provably fair odds uses cryptographic hash functions like SHA256 and SHA3 to calculate the hash value from data input. One can do this using any number of inputs—from one past result to all results from the tournament so far. Every approach provides an output that’s impossible for anyone but those running the system (in this case, an online sportsbook) to manipulate.
Once this output has been obtained by querying node operators via their APIs, it can then be published publicly. As such, all participants can verify its validity before placing their bets.
Tokenization is converting rights to an asset into digital tokens on the blockchain. The process makes it easier to buy, sell and trade assets. For example, if you want to purchase a car but don’t want to worry about finding someone who will pay cash on delivery, you can use smart contracts or tokens as collateral instead of money.
The main benefit of tokenization is that it allows people to own and transfer their property without directly possessing it. That means investors have access to more opportunities for profit than ever before. In addition, they can freely trade their assets without worrying about physical ownership limitations in traditional markets.
It is not impossible to see tokenized assets impact sports betting. Some people like to bet big through steep wagers. Putting up real-world collateral that isn’t money can make sports betting more attractive. Web3 will introduce many potential use cases for tokenization in this industry.
With the development of web3, we have seen a paradigm shift in online sports betting. We are moving from a centralized system to a decentralized one where players can bet on their favorite teams and watch the game live with other fans.
By using smart contracts, the blockchain provides secure transactions and ensures transparency among all parties involved in betting. Moreover, it creates a funnel for the tokenization of real-world assets. That impact on sports betting can be rather spectacular.
The post How can web3 improve online sports betting? appeared first on CryptoMode.
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