Blockchain case study: Provably Fair algorithm from CoinGaming.io

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The nature of blockchain – and the giveaway that it is also called distributed ledger technology – means that is applications go far wider than its utilisation in cryptocurrencies, as is proven in our report. For the gambling sector, one obvious route is testing and verification of games.

This certainly is the view of Tim Heath, the chief executive of CoinGaming.io, a company which has already set out its stall in the provision of the technology behind Bitcoin-based casino gaming. But Heath points out that beyond that application, the company’s games developer OneTouch.io has also built an algorithm for card dealing that has the potential to be similarly ground-breaking.

“While it is less of a problem in the mature markets of Europe, online gaming still suffers from a lack of trust in a number of jurisdictions,” he says. “Players are suspicious that games are cheating them out of their money. The blockchain provides an opportunity to offer players ‘provably fair’ table games.”

OneTouch has hence developed a SHA-256 Provably Fair algorithm whereby neither the dealer nor the player can know in advance the order of the cards to be dealt. ‘Provably fair as a concept was only invented in 2012 (see the Blockchain Report); the algorithm means that the player can hence have a means to verifying that the order of the deck cannot be altered after they have participated in the shuffling. Says Heath: “Players can play an active role in shuffling the deck to ensure the highest level of fairness, randomness and transparency.”

Heath goes on to explain how this system works. The servers randomly generate a shuffled deck and provide the player with a summary of the deck in encrypted form. The payer can then either enter a player seed or can allow one to be generated from their browser. When the payer hits deal, the deck is shuffled a second time based on this player seed, to produce a final deck. After the game is over, the initial deck, dealer seed and final deck are all revealed. Players can then use a verification tool to check consistency throughout.

The SHA-256 Provably Fair algorithm means that changing the order of the deck, even by a single card, would create a completely different hash that would not match the others. As everything is logged on a blockchain, the record is permanent.

“It is absolutely critical that players have complete confidence in the legitimacy and fairness of the online games they play, and using the blockchain to make the player a part of both the random seed and the verification process is the most robust way to do this,” says Heath.

“I would expect it to become an absolute minimum expectation from players in the coming years, as the average user becomes more conscious of the importance of transparency and security when gaming online.”