FunFair and the Future of Blockchain Gambling

funfair blockchain gambling

Whether you partake in gambling or not, it’s a big industry. Each year, casinos across the world in places like Las Vegas and Macau rake in cash by the billions. Lotteries also earn tens of millions or more for various government agencies. Sports betting, fantasy sports, and even home gambling games of poker and mahjong have been cultural mainstays for years or even centuries.

So what does all of this mean to the blockchain investor, and what exactly is FunFair?

FunFair: Ethereum Powered Gaming

FunFair is an Ethereum based platform that is designed to offer transparent, open source, and completely fair gaming and gambling. The FunFair project has already created a handful of games including poker and slots, that are visually attractive and fun to play.

The games are powered with FunFair (FUN) ERC-20 tokens. If a player wins a game, they are rewarded with FUN tokens, which can then be exchanged for bitcoin or other cryptocurrencies through ShapeShift or any other exchange that supports it. FUN tokens are also supported by popular multi-asset wallets like Exodus, MyEtherWallet, and Jaxx.

The games that are available now are either currently off blockchain examples, or are running on various Ethereum test networks. There are currently no live betting games with real FUN tokens yet.

Lack of Trust in Online Gaming

In a white paper released by Cypher Capital titled “Valuation of a Blockchain Gambling Token,” the author cites several a 2016 study from The UK Gambling Commission, where online gambling is legal, that indicates there is a lack of trust in online gambling websites.

The issue stems from users not being able to see what is going on behind the scenes. These sites are not open for auditing of their code, or their random number generation process. Users also cannot see exactly how their bet was processed, and how the outcome was determined. This means that the operator of such a gambling website could potentially be artificially manipulating outcomes to ensure profits.

A Blockchain Solution

The Ethereum blockchain is an open ledger, and as FunFair operates on Ethereum, everything is open to inspection and auditing. For example, the FunFair slots game could be carefully reviewed by a nonbiased third party in order to ensure absolute fairness.

In order to reduce transaction fees, FunFair uses a unique technology called Fate Channels. This is essentially a method of using smart contracts to store the state of an online gaming session before committing it to the blockchain (and thus incurring an Ethereum fee).

Here’s how it works. The player pays a small fee to start a gaming session and deposits FUN tokens into the contract. The player then plays as many individual games, rounds, or hands as they wish. Each time, the outcome is stored within a smart contract. Once the player is finished, they can cash out, which closes the contract, and stores the results on the blockchain. The final balance of FUN tokens is then sent to the player’s account. Naturally, if they had a positive outcome, they would be sent more tokens than they started with. Conversely, if they lost, they would be returned fewer or no tokens.

FUN Valuation

As of press time, FUN tokens are trading for about $0.02 USD each. When FUN was first available on the market, they were trading at $0.027 each. The market cap for the currency presently stands at just under $75 million.

According to Cypher Capital’s white paper, after several years, the value of a single FUN token could be anywhere from $0.30 to as high as $1.50. This is, of course, just the prediction of the white paper, and there is no absolute way of knowing what each token will be worth several years from now.

What we do know is that gambling and gaming globally is a multi-billion dollars business. Online gambling has been growing rapidly and has shown no signs of slowing down. The biggest hurdle stopping online gambling is lack of trust and fear of fraud. FunFair seems to have a solution to the problem of trust, but they have yet to prove themselves in the real gambling marketplace.

The biggest risk that FunFair is facing, is simply the general public’s potential lack of knowledge or interest in cryptocurrency. The average casino gambler likely knows nothing of Ethereum, let alone bitcoin or any other cryptocurrency. This does not mean that adoption is impossible, however. It does mean though that adoption may take several years.

If Cypher Capital is correct in their assertion regarding the potential popularity of FunFair in the next few years, we may indeed see a much higher valuation of the FUN token.

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