The defining feature of a true crypto casino explained.
Provable fairness is a comparatively new innovation intrinsic to online and in particular crypto gambling that reflects the demand for a “trustless” environment to conduct betting business. The idea of trustlessness was popularized by the cryptocurrency domain and advocates the removal of the need to trust the counterparty by enforcing contractual fairness in the code itself.
In provably fair gambling, the debate whether to trust the casino not to cheat you becomes a moot point because the implementation allows for a retrospective verification of fair betting. You as a player remain fully in control of your fortunes and can at any time certify that the bet you observed was entirely the product of chance.
How provably fair betting works
The concept of provable fairness revolves around secret random number generation, key exchange mechanisms and subsequent cryptographic verification of results. In principle provably fair betting resembles asymmetric public-private key cryptography in which two parties create a common secret shared between the two as the basis of further communication. Here the common secret is a random number seed which has been influenced by both the player and the casino and which is then used to derive the betting outcome.
The casino generates a secret random seed. The casinos sends a hash (i.e. a checksum) of the random seed to the player. Hereby the casino effectively commits to its secret random seed for the upcoming bet.
The player generates a random seed or chooses one and sends it to the casino.
By concatenation or some other function both seeds are combined into a new random seed. According to some agreed upon and transparent mathematical function the bet result is derived from the seed and resolved.
Optional Step 4: Verification
The player can now request the casino’s secret seed and compute its hash function on his end. By comparing it to the hash previously transmitted in Step 1 he ensures that the casino did not adjust the common random seed in its favour. Additionally he may also check the derivation of the bet result thereby certifying the fairness of the process without trusting the casino.