Many people who visit casinos have a lingering suspicion that the games they play may not be completely fair. More than a decade ago, a security guard sued a Las Vegas casino, claiming that he was fired for exposing the rigging of a game. Douglas A. Poppa claimed that the Riviera Hotel and Casino had rigged a game called "Money Blast" to ensure that no patron could ever hit the jackpot.
Such cases are exceedingly rare, and there are many laws in place to ensure that in-person gaming is fair. However, the blockchain gaming space is often more difficult to regulate, particularly when casinos pop up all over the world, subject to a variety of different jurisdictions and different laws.
That’s one reason that crypto enthusiasts have promoted provably fair gambling to help create trust between patrons and the casinos where they gamble. When you use your crypto assets for gambling, you want to make sure that you are participating in a fair game that gives you a fighting chance of winning.
Notably, provably fair gambling has seen significant global adoption, with the blockchain gambling market valued at over $250 million in 2023 and projected to grow at a 10% CAGR until 2030. This rise in adoption highlights the increasing demand for transparency and fairness in online gaming.
In our article, we'll take a look at the world of provably fair games and how they work to ensure fairness in blockchain gambling. But before we can do that, we need to discuss what it is.
Understanding Provably Fair Systems
Provably Fair is a technology designed to ensure that users a crypto casino can see how transparently fair a game is. This technology is designed to show that a casino uses provably fair games and that users can trust that games are above board.
Historically, there was little way for gamblers to evaluate the fairness of a game. Gamblers simply had to trust that the operator was acting in a fair way. This, of course, often led to trust issues, especially when gamers did not hit jackpots or rack up big winnings and became suspicious.
That’s where provably fair casino games came into play. In provably fair bitcoin gambling, every game outcome is tied to a cryptographic algorithm, which allows players to confirm that the game was fair and that no manipulation occurred.
In fact, over 60% of blockchain casinos today implement provably fair algorithms to enhance transparency and trust among players. This shift represents a growing trend in online gaming, where fairness can be independently verified instead of blindly trusted.
When a provably fair crypto casino deploys these methods, the algorithm ensures that:
Independent verification of each game round
Every game round is independently verifiable. Players have access to the underlying data to evaluate how the game is run and the mechanics that led to the outcome.
Guaranteed randomness
Randomness can be guaranteed. The system uses random number generators and cryptographic hashes to ensure randomness and thus fairness.
Full transparency
Transparency is available for all parties. Players have access to all the relevant data, so they effectively become the oversight team watching each game for fairness.
Provably Fair vs Random Number Generation
Before we can get into the nitty-gritty of how provably fair works, we need to be sure to clear up one misconception. Provably fair isn’t the same as Random Number Generation. Historically, random number generators have been used to create fairness in online gambling, but provably fair offers much more than random number generation:
Random number generation
It utilizes complex algorithms to generate seemingly random numbers that are unpredictable and thus make games fair. However, these occur in a closed system where the gamer has little access to the mechanics of the particular random number generator used and thus must simply trust that the game is fair.
Provably fair gambling
It prioritizes transparency on the other hand. Provably fair systems also use randomness to guarantee fairness, but provably fair also adds a level of verification so gamers can feel confident that the game is, indeed, fair. In this system, every round of gaming comes with a "receipt" that shows how the system calculated the gaming outcome. Thus, a gamer can independently verify the outcome without needing to simply trust that it was fair.
One of the biggest advantages of provably fair casinos is that they often have a more transparent house edge. While traditional platforms typically have a house edge of 2-10%, provably fair casinos allow users to verify actual odds, increasing trust and fairness in the gaming experience.
For a game to be considered provably fair, it needs to meet three key requirements. These are:
- Random. The outcome of the game must be determined by a random process, such as a random number generator or hashing.
- Immutable. The outcome of the game must be fixed before either the player or the game operator is informed of the results.
- Player participation. The player or an independent third party must be involved in generating the variables used to create the final result.
How Provably Fair Gambling Works
It uses a complex mathematical formula and cryptography to determine the outcome of a particular round of gaming before the player makes a wager. This occurs on both the casino’s end and the player’s end with random numbers generated by both, and a unique identifier for the player. These variables, as they are called, combine to produce the unique outcome for each round of gaming.
The three key variables are:
- Player seed. When a player begins, the player will choose a unique number, either manually or through random number generation.
- Server seed. Similarly, the casino will generate a number of its own, called the server seed, which is kept hidden from the player.
- Nonce. This number identifies the round of play and increases with each bet, providing a unique identifier for each game.
Now, once these three variables have been generated, provably fair gambling kicks into gear. Let’s begin by imagining that you are a gamer who is about to place a bet on a game of roulette. When you initiate game play, the game generates a server seed, a random number generated by a secure method. From that point, the process of "hashing" turns that server seed into a string of characters. It might look like this: TefeWWfjwraWRrvQfp. The hashed seed is provided to the player before the start of the game. It’s basically determining the outcome of the game and placing that outcome in a sealed envelope.
At the same time, you select your player seed or have it generated for you. Your player seed is then combined with the server seed and the nonce. This combination, when run through a complex algorithm yields the games outcome and ensures that the results are random, fair, and tamper-proof. After the roulette wheel spins, you will receive the original server seed.
This yields a provably fair game because you can then compare the original server seed that was provided to you at the beginning of the game with the hashed version used in the game. If they match, you know that the game was fair.
The Security Benefits of Provably Fair Games
One of the key benefits of provably fair gambling is that it is extremely unlikely to be hacked. The server seed, for example, is protected by the complex process of hashing. This process is so carefully protected and so complex that even if hackers managed to get hold of the hashed version, it would be virtually impossible to reverse engineer the original server seed from the hashed version. SHA-256 encryption is so advanced that currently, only a hypothetical quantum computer not yet invented could crack it. Similarly, the player seed is kept secure through casinos’ struct data protection protocols, thus preventing outside users or hackers from accessing the player's seed.
Conclusion
The use of algorithms in provably fair gambling helps to create security and transparency throughout the gaming process. This style of gaming gives the player a degree of control by ensuring that the player has the ability to audit a game to ensure that it is fair. The benefits of this technology are so self-evident that many anticipate that it will become the regulatory gold standard for crypto gaming, much the way in-person casinos have to meet certain regulations and standards to demonstrate the fairness of their games. In the short term, creating compatibility standards across platforms will help to expand the reach of provably fair systems.