Here on Coinbet.com we talk an awful lot about bitcoin as a currency that online gamblers can use to play their favorite games.
There are a lot of good reasons for that. However, there is more to bitcoin than just playing online slots and table games. In fact, bitcoin is very influential even outside of the cryptocurrency space. Just look at the blockchain technology.
The blockchain concept was developed by the same person or persons who created bitcoin more than 10 years ago. What we now refer to as blockchain technology all stems from the birth of bitcoin. What's most fascinating about blockchain is that its usefulness is not limited to financial transactions.
How useful is blockchain? So useful that it can be implemented across a variety of industries and technology sectors to accomplish some amazing things. One good example is deploying blockchain technology in order to facilitate a vertical supply chain. Walmart, the well-known American big-box retailer, provides a perfect example. They just announced a requirement for all their produce suppliers to be on board with blockchain technology by 2020.1
If you supply produce to Walmart and want to continue doing so, you are going to have to implement a record-keeping and transaction system capable of interacting with Walmart's blockchain. While this could be problematic for some providers in the short term, it is going to be beneficial to everyone in the long term.
A little bit about blockchain
We have discussed the fundamentals of blockchain in some of the other posts here at Coinbet.com. Let's talk a little bit more about those fundamentals to better understand what Walmart is doing. Here's the first principle to understand: blockchain is, in its simplest form, a growing and linked chain of records. Take one block of computer data, add it to another block, and you have started a blockchain.
Each block added to the chain contains at least three critical elements: a cryptographic hash that links to the previous chain in the block, a timestamp indicating when the new block was created, and the transaction data pertaining to that block. The cryptographic hash is one way - directionally speaking - making it impossible to modify or reverse data once it has been added to the chain.
Also note that blockchain is a decentralized, distributed ledger. This means that there are multiple copies of the blockchain in circulation at any one time. Every time a new transaction is added to the chain, all the distributed copies are updated. The distributed ledger concept guarantees that each and every transaction is verified multiple times before being made permanent.
Blockchain and vertical supply chains
Now let us talk about how blockchain is helping Walmart and its produce suppliers. It is all about establishing a vertical supply chain that keeps everyone in the loop.
As things currently stand, there are literally thousands of operations that are somehow involved in supplying Walmart with produce. From growers to cooperatives and distributors, there are way too many hands involved to easily track produce when a problem arises.
Earlier this year, 36 U.S. states were involved in an E. coli scare when tainted lettuce sold by Walmart sickened more than 200 people. Five people actually died. The vastness of Walmart's nationwide supply chain made it nearly impossible to find the source of the tainted lettuce quickly. They eventually did trace the problem back to an irrigation system in Arizona, but it took weeks to do so.
The current system relies on numerous horizontal supply chains that make the source of individual produce extremely difficult to quickly identify. Blockchain technology solves that. Blockchain establishes a vertical supply chain in which every move of the produce is tracked. If a problem ever arises, Walmart can simply follow the chain backward until it arrives at the source of the problem.
Corporate blockchain not all that different
The kind of blockchain Walmart is using is known as corporate blockchain. By contrast, a financial blockchain is used to keep track of bitcoin transactions. But the two blockchains are not all that different. Neither is it all that different from a technology blockchain.
Whether you are talking about online gambling, tracking produce, or building smartphone apps, the same fundamental concepts are at the core of every blockchain. The only real difference is the type of data being tracked in the chain. So just like Walmart can use its blockchain to trace the origin of produce simply by following the chain backward, bitcoin developers can track each and every coin by following the chain that relates to it.
Let's say you purchase bitcoin with the intention of using it to fund your online gambling account. Once the purchase is made, a record is entered into the blockchain reflecting the transaction. Every copy of the blockchain records the same data. Now, anyone who cares to look at the blockchain can see that your bitcoin was purchased.
They can also follow the chain to find out where the bitcoin was before you bought it. They can follow the chain all the way to its source. This is because the fundamental concept of blockchain is decentralization. The information is open to anyone and everyone but controlled by no one.
Yes - it is secure
It's easy to be suspect of blockchain due to its decentralized nature. People automatically assume that it is not secure because so many copies of the data are distributed worldwide with no centralized, controlling authority. But let us assure you that the system is very secure.
First of all, the data is encrypted. If the average person on the street were to get hold of a copy of bitcoin's ledger, it would mean nothing to him/her. It would be nothing more than a list of numbers and codes that have to be cracked. And cracking that code is by no means easy.
Even if the code were cracked by hackers, it would do no good. Why? Because transactions are irreversible. Once a transaction has been finalized and added to the chain, it cannot be modified in any way. It cannot be removed, it cannot be reversed, etc.
It is also important to note that individuals and organizations are represented as digital keys in the blockchain. Those digital keys are only known to the parties that use them. So if you were to buy bitcoin in order to gamble online, you would use a digital wallet represented by a digital key. The casino would have its own wallet and key.
Both you and the casino would use an electronic address generated by your wallets to complete the transaction. Those addresses are unique to that transaction - at least as long as both you and the casino follow the standard practice of creating a new address for every transaction.
The end result of all of this is that it is nearly impossible to trace transactions beyond digital keys and addresses. Someone might know that bitcoin was transferred to your address, but they will not know that address belongs to you. They will also have no way of discovering that. The use of encrypted digital keys and addresses makes blockchain truly anonymous.
Of course, anonymity will not work in a corporate blockchain like the one Walmart is using. Walmart cannot allow its suppliers to remain anonymous and still reap the benefits of using blockchain technology. So anonymity is not part of the equation for them. Suppliers will not be anonymous once they join Walmart blockchain in 2020. But that will not matter because Walmart blockchain doesn't involve data that requires anonymity.
Blockchain and online gambling
Turning our attentions back to gambling, it is intriguing to think of some of the ways blockchain could be used above and beyond accepting cryptocurrency banking solutions. While bitcoin's blockchain is the foundation of making bitcoin deposits and withdrawals, both online casino owners and game developers could implement blockchain for entirely different reasons.
For example, let us say you have a game developer that produces half-a-dozen progressive jackpot slots such as MegaMoolah.com. They decide that rather than having those jackpots be local, they will be networked across all their licensed operators. Blockchain technology would offer a great way to track progressive jackpot data in a fast, vertical, and nearly instantaneous manner.
Game developers could use blockchain technology to track how new games perform in the marketplace. They could implement the technology in order to create a better network among licensed operators. The possibilities really are endless here. Blockchain could do a lot of things that would revolutionize online gambling.
Blockchain goes well beyond just transacting with bitcoin. We cannot help but wonder if the developers behind bitcoin new the real potential of blockchain when the idea first surfaced. Whether they did or not, the one thing that can't be argued is that blockchain technology provides a way to track and manage data that is simple, fast, reliable, and secure.
1) Walmart Requires Lettuce, Spinach Suppliers to Join Blockchain, Wall Street Journal.