BetterBetting has provided financial security with peer-to-peer betting by using blockchain technology. Expanding access to more jurisdictions by offering a larger, global betting liquidity pool provides a revolutionary counter to the traditional world of sports betting. SiGMA speaks to CEO and founder Adriaan Brink.
Blockchain tech aims to show the way forward when it comes to eliminating the trust gap and providing fully transparent betting contracts. The contentious issue is currently on the lips of many in the iGaming universe. So how important is this to the current state of play?
According to Adriaan Brink, bridging the trust gap doesn’t register as particularly important in a regulated market. In the UK it is largely a problem that doesn’t exist. Brink believes there’s no pressing need to use cryptocurrencies like Ethereum for gaming transactions in the UK, from a trust perspective.
Their market is currently very well supplied with efficient payment mechanisms. In other regions where the market is lacking, the adoption of new payment mechanisms will occur more quickly. That said, the BETR currency launched by BetterBetting is not purely a payment mechanism – it also incorporates a firm betting logic. In that respect it also addresses a potential need in the regulated market as well.
If the regulation is too overblown and onerous it will kill innovation
The currency incorporates the escrow process for the bet from both parties. When you place a bet using the BETR currency, the funds from the bettor as well as the risk from the layer of the bet are escrowed. That risk and stake are held on the blockchain until such a time as the result is known. At that point, they’re settled and paid to the winner. What that means is that in a peer-to-peer bet, you can rest assured that you’re going to get paid by the other party.
Looking down the road, perhaps in a year’s time, we might see the emergence of little widgets for Twitter or WhatsApp. Bar an initial once-off registration, users will be able to see an odd, click it and place their bet – without going anywhere near a sportsbook.
The client-based authentication process for Ethereum or any of these crypto currencies is quite strong. There’s no requirement for additional authentication beyond that. Essentially, this means you can decentralise your process without eschewing security and regulatory considerations.
Despite fears that operators can’t be trusted, and gripes about the odds being unfair, people do generally place their trust in sportsbooks. The truth of the matter is that sportsbooks survive by being trusted by their customers. The trust gap doesn’t loom that large in a regulated market, although when it comes to the amount of bets you are able to place it does raise some cause for concern.
According to Brink, regulated markets, particularly those in the UK, tend to be restrictive in that domain – which means that liquidity is not available to bettors. What BetterBetting is planning is to provide is a global liquidity pool. Whereas a bookmaker may choose to only a certain amount on a bet, there will very likely be a bookmaker in Asia or elsewhere that will accept a much higher bet.
These are liquidity pools that professional bettors take advantage of all the time, something the average guy on the street doesn’t normally get a look in on. Accessibility to these other bookmakers offers a much bigger liquidity pool to the average punter. Their substantial exposure in Asia means they are perfectly positioned to provide a sizeable liquidity pool to bettors.
Navigating blockchain technology means steering through unchartered territory. The lack of clarity with regulation is an ongoing theme for many companies trying to comprehend a half written rulebook. Malta is trying to be one of the first jurisdictions to create a clear set of rules for blockchain-based companies. How attractive is Malta to an ICO if this law is eventually enacted?
It is a bit of a double-edged sword. Part of the reason why the ICO space has been so successful is that there hasn’t been any regulation. For Brink, it is inevitable that regulation will eventually appear in this space. “Regulation is a good thing, as it gives a level of security to smaller investors who aren’t able to carry out due diligence, who don’t understand the space sufficiently. On the other hand, if the regulation is too overblown and onerous it will kill innovation,” he says, adding that finding the right balance is hard.
Gibraltar is also putting together similar legislation. The main concern is that it will chase away people who are not prepared to go through the over-regulated environments, pushing them to migrate to jurisdictions that are less strongly regulated. It’s early days yet. No doubt the markets will eventually settle, much like the public markets have.
The uncertainty in the market means questions are being raised about where the next big thing in blockchain might be coming from. For Brink, it’s the business need being addressed, rather than the relative sharpness of the tech, which mostly determines the success or failure of a particular application of said technology.
“With truly decentralised applications such as ours you have to assess the business model – the most pertinent question is whether there is an underlying business, either a new one or existing one that address a problem which can genuinely add to the feature set.”
The crux of the matter is whether the business actually adds something of value and of genuine use that would survive beyond the ICO stage.
Existing blockchains will likely become more efficient, although none are quite ready for release yet. It is likely that by the end of the year new blockchain innovation will be released into the market.
“There’s a lot of innovation going on in this space,” he says. “None of the innovation directly impacts whether the ICO business model is going to work or not. What directly impacts the ICO model is whether the ICO address the business need or not.”
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