One of the big advantages of blockchain-based applications is the opportunity they offer for decentralization. Online gambling is just one of the industries facing a revolution in the way it functions, thanks to the decentralizing properties of blockchain technology.
Online gambling is dominated by large companies, each of which holds the personal data of millions of users. This creates huge “honeypot” targets for hackers. These big companies are also vulnerable to changes in government regulation, or public pressure. Account holders have found their funds frozen or winnings not paid out due to policy changes.
The centralized model also means that gambling platforms must maintain large reserves to pay winnings, as well as charge extra fees for third party payment processing. These costs are all passed on to the customer.
Canadian betting app Mevu has already solved many of these issues. Powered by blockchain, its users are able to bet directly with each other, rather than against “the house”. Both parties to a bet will have their funds held in escrow. Once the bet has been settled the funds will be transferred directly to the winner.
Decentralizing Truth
In settling the bet, Mevu has come up with another innovation: “decentralizing truth” through its Oracles. As co-founder and technical lead Tim McCulloch says, “we don’t use any third party APIs to retrieve information as to the results of the bets on our platform.” Instead of relying on an external (and centralized) system to determine truth, Mevu uses “Oracles”.
What’s MEVU? from meVu.bet on Vimeo.
McCulloch describes Oracles as “users that hold our token and decide to stake some of it on our platform to determine who actually won the bet.” The information from these Oracles is used by Mevu to settle any disputes over who won each bet. Oracles who are “found to be against the consensus of the correct result will have to forfeit half of their stake to the oracles who were with consensus.” In this way all parties are incentivized to correctly report the result.
For McCulloch and the Mevu team, this decentralizing of truth follows from the “philosophy of unstoppable apps that actually founded Ethereum.” As well as the MVU token, users will also be able to bet in ETH, the world’s second most widely adopted token, thus improving volume and liquidity across the platform.
