Let’s be clear. I find gambling to be boring and stupid myself, and I don’t admire gambling businesses that are built the weaknesses of people. Casino and other on-site gambling is a bad idea, but at least it gets people out in the world a little bit. Online gambling is a really, really bad idea, enabling people to feed their worst inclinations in the privacy of their own home.
You won’t b surprised that I’m not a big fan of the new initiative by an opaque company called Better Gaming, who are building an Ethereum Slot Machine: a slot machine that uses Ethereum smart contracts.
“The innovation here is that this game is running entirely in a smart contract. No servers are required to operate the game, unlike existing online casinos.”
Running “entirely in a smart contract” isn’t quite accurate: there is no server, but much of the logic runs on your local device. However the logic of the gambling machine is implemented with smart contracts, which is the main point.
Readers of this blog know that I have a low opinion of “smart” contracts, Ethereum or otherwise. So, I’m especially excited to see this poorly designed technology used to implement the inherently bad idea of a slot machine. Not.
Obviously, the game itself isn’t innovative. They have gone to great trouble to replicated the behavior of these ubiquitous one-armed bandits. The “innovation” is to eliminate the server, in a “fully decentralised and provably fair.” system.
For once, this Distributed App (Dapp) is actually solving a real problem: trusting your online gambling provider not to cheat is, well, a gamble. Gamblers can’t win, but they want to lose honestly.
“The game’s logic has to be wholly processed within the smart contracts so that anyone who wants to can see that the game is playing by the rules and can’t cheat”
Of course, they are also “solving” another problem, how to run an unregulated gaming operation, “off shore” from everywhere. Cryptocurrency is, if nothing else, a perfect digital “poker chip”, easy to move around, and not tracked by annoying tax agencies or vice squads. This slot machine isn’t taxed or regulated, and all the money goes…who know where it goes?
To give them their due, there are a couple of legitimate technical innovations in this product (at least according to their write up).
First of all, they made the user app asynchronous from the blockthain. It’s extremely important to give instant gratification to the
lab rat gamer, and the blockchain has too much latency to always respond instantly. So they worked out protocols to mask the delay, presumably with caching on your local device. This is a significant achievement, and certainly caught Corin Faife’s attention in Coindesk. If this is successful, it may be a model to emulated by every Dapp.
A second technical feature is the random number generation (RNG). As Donald Knuth pointed out all those years ago, “Random numbers should not be generated with a method chosen at random.”  This group uses the blockchain with its pseudorandom hash in its random umber generation. I’m not sure what their method is, exactly, but this is a rather clever idea because the hashes are already very solid pseudorandom numbers.
Overall, this is yet another example of how bad ideas sometimes inspire brilliant software. This sounds like it will be a very solid implementation of a bad idea (a digital slot machines), and it will make excellent use of a bad idea (Distributed apps using Ethereum contracts), with some creative technical wrinkles. Sigh.
One sign that this is technology whose time has come: the Better Gaming folks are already making legally licensed online games, and presumably making money. Yet they believe it is worth building with this new tech, even though they are well aware that the powers-that-be will not easily approve it. They should get credit for a gutsy technical gamble, and it shows just how promising this technology is.
“it’s so new that we don’t expect regulators to fully grasp nor appreciate the implications overnight and there will need to be lots of discussion and negotiation before existing gaming jurisdictions license such activity.”
- Corin Faife, Watch This Ethereum Slot Machine Make Payouts in Real Time. Coindesk.April 21 2017, http://www.coindesk.com/watch-ethereum-slot-machine-video/
- Donald Knuth, The Art of Computer Programming: Vol. 2: Seminumerical algorithms (3 ed.). Boston, Addison-Wesley, 1997.
- Jez San, 1st Demonstration of real-time casino games built with Ethereum Smart Contracts, in Medium. 2017. https://medium.com/@aerobatic/1st-demonstration-of-real-time-casino-games-built-with-ethereum-smart-contracts-165ba72be02e