Hello dear readers and welcome back to our MegaCrypto Casino website and the next instalment in our series of articles on the subject of crypto casinos, cryptocurrency and all things related.
No doubt, a genuine interest in crypto casinos, crypto betting and a motivation to generate a monetary yield thereby, has brought you here; in which case, MegaCrypto Casino is exactly the right place for you and will put you onto the right track. However, by creating our series of articles, we sincerely hope that these will also yield your insight and knowledge and aid you in your onward quest.
In today’s article we will be looking at how fair crypto casinos actually are and the associated emergence of ‘Provably Fair’ as the new standard of trust.
But first, in order to arrive at ‘Provably Fair’ and as is our wont, we will start right at the beginning, examining the fairness of traditional casinos and online casinos, before comparing and contrasting them with crypto casinos and deriving an opinion as to their provable fairness.
Physical Casinos - Provably Fair?
So, let’s begin at the beginning of casino evolution with the traditional bricks-and-mortar physical casino. We’ve all been there; we dress up, walk in, feel like James Bond at Casino Royale, have some drinks…and then proceed to lose our shirts…or actually, sometimes walk out a winner. So, does this empirical experience help to uncover these casinos’ provable fairness or otherwise? Well not really…AND… (spoiler alert upfront), traditional casinos are not Provably Fair.
But to give them their fair due, they are not necessarily scamming you either. We are all adult enough to know that physical casinos are run as profit making businesses: If everything was down to pure randomized chance then the house would lose as many times as it won and would not be able to financially support its physical infrastructure, staff costs, utility costs etc.
So how does the house overwhelmingly end up winning even when a customer wins?
Well, every casino game is designed so that the house has an ‘edge’ in every game. This edge is a mathematical/statistical advantage in favour of the house which ensures that in the long run, the casinos will always profit over customers. In line with statistical probability, the longer that play goes on, the greater the likelihood that the statistical probability will align with the casino. Casino customers do, of course, win; however, this also serves the house. The aim is not to take every single penny from you; by allowing statistics to fall in your favour just enough to keep you coming back, in the long-term, the house’s Gross Profit will outweigh any casino customer winnings.
Due to their inherent nature, games often differ significantly in their ‘house edge’; for example, Keno (similar to Bingo but fast-paced and self-selected numbers) has a high house edge, whilst Blackjack has a relatively low house edge. Additionally, casinos will usually charge a scaled commission fee (called a Rake), on every card game; commissions can range between two and ten percent of the total pot, although they can sometimes also be capped.
As another example, roulette is a very popular casino game, so how can the house gain an edge in a seemingly randomised outcome game like this? A casino roulette wheel has 36 numbers to choose from so statistically, your odds are 36 to 1. However, by adding a zero, a double zero and sometimes even a treble zero, your odds drop to 37, 38 or even 39 to one. Pure statistical advantage.
Ok, so what about slots…surely this is completely random? Well yes, however, even here, it is possible to statistically skew the results. Specifically; although a casino slot machine ‘reel set’ (Random Number Generator and Reel Mapping) will select random positions on a reel where the symbols stop, this can still be slightly skewed by such measures as designing where on a reel symbols might be positioned as well as how many of them might actually be on a reel and how closely they might be located together.
Statistically, this allows a rough pre-determination as to the likelihood of certain symbol combinations and thus, how statistically often a player might win. Although on the face of it, this might sound hugely biased, only a very small statistical edge is in reality required for a casino to profit. For instance, if the statistical edge is set at somewhere in the region of ninety-five percent for instance, then for every Pound wagered, just ninety-five Pence is reclaimed as winnings by a casino customer.
So, there we have it; the workings of a traditional casino laid bare. Not really unfair, as you go through the doors knowing exactly what you are getting into…but certainly not Provably Fair.
In any case…for many of us casual casino-goers, the winnings or losses have oft-times paled into insignificance compared to the extensive Bar Bill at the end of the night…I guess therein, the house wins again!
Online Casinos - Provably Fair?
Moving up through the timeline of casino evolution, we come to the first casinos of the internet age; online casinos. Requiring nothing more than an internet connection and required funds to stake, you can roll like a Boss, from the comfort of your own living room. But are online casinos Provably Fair? Let’s take a look.
So, before determining whether online casinos are Provably Fair or not, let us first take a look at what these casinos have on offer for erstwhile casino afficionados.
Actually, there is quite a lot on offer:
- Casino Slot Games: examples include Classic Slots, Video Slots and Progressive Jackpot Slots.
- Casino Table Games: examples include Roulette, Baccarat, Blackjack and Craps.
- Live versions of the above Casino Table Games.
- Casino Specialty Games: examples include Scratch Cards, Keno and Sic Bo.
Of course, as there is no actual physical casino, all of these games are virtual; so how is the outcome of games actually decided?
Well, the outcome of the games are prima face randomised via the use of Random Number Generators (RNGs), so technically, the outcome of every game should be completely random and thus, Provably Fair. But why don’t we dig a little deeper and examine how a random number generator actually works.
Online Casinos’ Random Number Generators
Random number generators are actually quite commonplace and are used across a wide range of applications, such as Gaming, Finance Applications, Graphics and Cryptography.
But what exactly are random numbers? Random numbers are simply an unpredictable sequence of numbers: Hold the thought for now, that although unpredictable, they are not necessarily unique. For instance, if using the example of dice, then you can roll numbers 1-6. If rolling two dice, you could conceivably roll the number one, twice, two, twice etc, but you cannot predict the outcome of this, so the results would actually be completely random.
But how does this work practically in a random number generator? Well random number generators work as the result of re-occurring, morphing, mathematical equations for instance:
82 % 12 =
However, if we keep using just this, the answer will always be the same. So, we introduce a ‘Seed’. A seed in mathematical terms is an initial value (number or vector) used to start a deterministic process; most commonly a pseudorandom number generator (PRNG). It acts as the starting point for an algorithm. So in this completely figurative example:
Seed x 82 % 12 =
Where does the initial seed come from? It is selected by the user. So, for instance:
381 (seed) x 82 % 12 =
With the inclusion of the seed, the random number is now ready for number generation…so.
381 x 82 % 12 = 6
And thus, we now have our first output. Continuing; the generator output (6) then replaces the initial seed…and so on:
6 x 82 % 12 = 10 10 x 82 % 12 = 87 87 x 82 % 12 = 381
But therein, as we can see, arises a problem. Should the random number generator, randomly generate a repeat number (like the number 381 shown in the above example), the whole sequence will continue to repeat and no longer be random but pseudo-random. This can easily be remedied by the selection of a good initial seed; taking for instance, something such as today’s time in milliseconds, or the precise keystrokes used by a computer since powering on that day etc.
So, are the random numbers generated by online casinos completely random and Provably Fair? Well, yes and no!
The random number generators used by online casinos DO actually produce completely random numbers, however, this does not mean the house cannot ‘skew’ the results and build in a house edge. This can be accomplished not by RGN manipulation, but simply by game design: for example, a Roulette game can have more losing numbers than winning ones; Slots can be designed with a lower return to player (RTP), over the long-term; Card Games can be designed to be slightly less favourable to the player and favour the dealer, unless played in the optimal manner.
Essentially then, the online casino random number generators produce random outcomes but within the parameters of the house edge which then gives the house a mathematical advantage built into the rules and payout structure. Again, as with physical casinos, the advantage only needs to be slight, as their strategy is to accumulate Gross profits across extended play over the long-term.
In conclusion then, whilst online casinos do not participate in advantageous practices any differently to physical casinos, and whilst the random number generators determining their games’ outcomes are truly random, it cannot be said that online casinos are Provably Fair.
Are Crypto Casinos - Provably Fair?
Having now examined physical casinos, as well as online casinos, looked at the games they offer and how these can be skewed, and then judged them against the Provably Fair standard of trust, we will now similarly, look at crypto casinos and judge whether they are, in fact, Provably Fair.
But although we have been on a quest for the adherence of casinos to the Provably Fair standard since the start of this article, it might be useful, even this late in the game, to look at the somewhat detailed definition of Provably Fair…even though the name pretty much gives the game away!
But, for the sake of clarity:
‘Provably Fair’ is a transparency trust standard enabling participants to verify for themselves that the outcome of whatever they participated in was completely fair and not in any way manipulated.
Although, used extensively within the crypto casino space, it is worth noting that the Provably Fair trust standard is also utilised in other sectors, such as:
- Blockchain and Web3 Gaming (non-gambling); examples include NFT games, play-to-earn games and on-chain games. The main utility here is that gamers do not have to trust developers and can verify the fairness of said games themselves.
- NFT drops and Digital Collectables; the utility to NFT collectors is the verification of rarity in the distribution phase and the assurance that there is no post-minting manipulation; additionally, this prevents the assignation of rarity traits to insiders.
- DAOs (Decentralised Autonomous Organisation) and Governance Systems; typical usage is in the random selection of jurors, validators or reviewers, or the equitable assignment of governance roles, such as the fair rotation of committee members and similar. The utility here lies in the prevention of manipulation or collusion in the decentralised governance space.
- Supply Chain and Auditing Systems; used within the sector to ensure completely randomly timed inspections or audits and the random selection of shipments for said inspections. The utility being that it prevents predictability and hence, evasion.
As we have now covered the requisite preliminaries of our crypto casino fairness quest, this might be the ideal juncture, as we did with physical and online casinos, to briefly examine what crypto casinos have to offer…before moving on to the question of trust and fairness.
Several of the games offered by crypto casinos may appear very similar to those on offer at both physical and online casinos and in essence, this may indeed, be so. After all, how can you change Roulette or Blackjack etc from their essential format into something else? Well…by combining the most leading-edge technology, fast-paced play and graphics, thrills-and-spills, live communities and in-game surprises, crypto casinos accomplish exactly that. Add to that mix; instant deposits and withdrawals, complete anonymity and the ability to use your crypto at will, without answer to any institution, Government or other third-party, you have complete financial and personal freedom.
So, now to the offerings: Showcased are some of the most popular crypto casino games of the past year:
- Both Video and Classic Slots; These come in many varieties and feature highly immersive game play. They are particularly popular because of ease of play, high volatility options and the potential for big wins.
- Live Table Games: on offer are games such as Roulette, Blackjack and Baccarat. These are literally live and replicate the excitement of a physical casino by streaming game dealers in real-time. Personal interaction with dealers, live play and the possibility of high returns to players (RTP), all make these much-patronised options.
- Crash Games; these are actually a game set virtually unique to crypto casinos. Essentially, you stake your funds on a multiplier, watch as it grows and must judge when to cash out before it ultimately crashes. Of course, popular, because of the fast-paced rounds and the potential for very large multipliers.
- Dice Games; sometimes the basics are just the best. Popular because of its fast yet simple high-low plays and player adjustable risk levels.
If you recall from previous chapters, after examining the types of games offered by both physical as well as online casinos, we proceeded to examine just how both these types of casinos then proceeded to build in a House Edge; a mathematical bias that over the longer term, tended to favour the house and disadvantage casino players. Well, a prime driver of the ever-growing popularity of crypto casinos is their strict adherence to the Provably Fair trust standard. So, in contrast then, let us now examine exactly how crypto casinos build this player verifiable fairness into their games.
The mechanics of Provably Fair is a cryptographic mechanism allowing players to verify for themselves that game outcomes are indeed fair and not in any way manipulated. There are usually three components to this mechanism:
- A Server Seed
- A Client Seed
- A Nonce (NO! Absolutely NOT that kind!!)
As we already examined the concept of Seeds in previous chapters, this should already be familiar to you. Just know that the Server Seed is controlled by the casino but committed pre-game. The Client Seed is chosen or changeable by the player. Nonce stems from the phrase ‘Number Used Once’; a nonce is just a counter that ensures that each game round produces a unique result, even if the same seeds are reused.
A nonce will usually commence with a value of 0 or 1 and then progress incrementally and as each game round progresses, the system then simply combines the server seed, client seed and the current nonce, all of which are fed into a cryptographic function (such as a hash or a hash-based authentication code) in order to generate a random number.
Without the presence of a nonce, the server seed and client seeds would always generate the same result, which when running multiple rounds, would render the games unusable. The nonce, then ensures that games are deterministic but distinct. A good analogy would be that of a page number in a book; the source of the content is the same but the ‘output’ changes because you are on a different page each time.
Post game, the nonce is also critical for verification purposes, because when a player wishes to review their game history, each game will be linked to a specific nonce value. Arising from this, to verify the fairness of a game result, a player simply needs to re-run the fairness calculation using the revealed server seed, their own client seed and the value of the nonce.
Or somewhat more technically, post-game, players can:
- Hash the revealed seed and confirm that it matches the original published hash.
- Calculate for themselves the game result using the server seed, client seed and nonce value.
- Thereby confirm for themselves that each outcome exactly matches what happened in the game.
A good number of crypto casinos now also offer players in-built verification pages or even open-source scripts, however, players are generally also welcome to also utilise independent tools. The entire casino architecture is built to ensure openness, to prevent behind-the-scenes manipulation and ensure that fairness can be verified mathematically, rather than players having to rely on trust.
So there we have it; having now reached the end of our journey on the subject of the Provably Fair trust standard, and having held both physical casinos and online casinos up to the spotlight; we have found them wanting.
In contrast, having fully examined both crypto casinos and the technical functionality of crypto casinos, we can justifiably conclude that crypto casinos can indeed be deemed Provably Fair in accordance with the Provably Fair standard of trust.
We trust that you have enjoyed this foray into this subject and we hope that this visit to Mega Crypto Casino has in knowledge terms, also yielded you a worthwhile return on your time.
We will look forward to welcoming you back to MegaCrypto Casino very soon for the next in our series of articles on crypto casinos, cryptocurrencies and all things related.