Can Blockchain Help Online Casino Security?

The lure of the casino

The idea of ‘bringing down the house’ is one that most of us recognize. It implies the concept of emptying the casino either by fair means or foul. In a Hollywood sense, it certainly means by some form of deception, either by coming up with an elaborate scheme to outwit or manipulate the croupiers and gaming machines, or just by a good old heist as featured in the Ocean’s film series .

Gambling is a business; business is there to make money. Therefore, beating a casino at its own game is always a tall order, and to do so in a legitimate manner is almost impossible. What most gamblers know, when playing in a casino, whether in person or online, is that what you win on the swings, you lose on the roundabouts. While some people do have the composure to walk away and never gamble again if they cash out a massive jackpot, most people do not have the ability to do so. After all, casino gambling is a form of entertainment and is designed to be fun and alluring.

A system to be broken

However, there are plenty of people out there who see online casinos and their security as a system to break. Hackers and cybercriminals are constantly trying to find a way to empty the vaults without spending a penny. Online casinos for them are not so much a source of entertainment but a problem to be cracked. The same cybercriminals who target banks and online transactions are equally interested in online gambling platforms.

Online casinos are an attractive target for criminals who would like to ‘bring down the house’ in a variety of ways. There is the opportunity to intercept customer data and accounts and access funds illegally. There is the option of trying to ‘fix’ the random number generators powering most of the casino games to fix the odds in favor of the criminal and not the legitimate business. Finally, there is the good old-fashioned option of targeting the casino’s strong room (even if it is of the virtual kind) and walking off with the business’s takings (but this is more of a bank security issue because, unlike bricks-and-mortar casinos, virtual ones do not have cash on the premises).

Security is a serious business

Therefore, online casinos have to take security incredibly seriously to protect themselves and their customers. They also have to comply with sometimes onerous regulations to operate legally. However, within this growing vertical, we’ve also seen third-party watchdog sites pop up to police the security of these online casinos and further improve trust. The laws they need to comply with vary from state to state in the US and are different again in most countries globally. Therefore, while we might think of online gambling as a fun industry to work in, for those working to keep everyone safe and secure, it is incredibly serious. Therefore, the question comes up as to whether blockchain could be a solution for the industry in general.

Hackers intercept data as it is transferred between internet service providers, banks, and casinos. Blockchain is safe because the blocks connect to each other in a cryptographic chain that is almost impossible to tamper with. The transactions within the blocks use a consensus mechanism for validation, which ensures that each transaction is correct and accurate. Decentralized blockchain networks are difficult to hack because of their very nature. As they are decentralized, there is no single point of failure. Going back to the idea of the strong room or bank vault, there is no central store, but many multiple virtual strong rooms. The transactions are recorded and validated across multiple nodes in the network. This means that it is incredibly difficult for a single entity to manipulate the data.

Human error still undermines practical uses

However, while this might sound like a foolproof solution, fraudsters still attack blockchain technology, and it is not fail-safe. One Canadian teenager stole an astonishing $48 million worth of crypto from an American dot-com entrepreneur . He did not even do anything terribly sophisticated, but pulled off the theft using a SIM swap,

He persuaded the customer service representative of the dot-com entrepreneur’s cellphone provider to switch the SIM card associated with the number, enabling texts to be redirected. Those texts included two-step authentication. The next thing he did was change passwords and gain access to all the relevant accounts. He found tens of millions of dollars’ worth of cryptocurrency in the online wallet , which he transferred to his own accounts and subsequently laundered. As with most laundered goods, whether they be gold or cryptocurrency, their whereabouts remain unknown.

So, while blockchain is secure, the same scams and frauds continue that make security systems fail. It is not the systems themselves, but rather human error. In the case outlined above, persuading a customer service agent. However, it was hubris that led to the teen’s capture. He purchased the PlayStation Network “God” and the bitcoin used to buy the name was traced back to the haul that had been stolen.

Hacking methods

Hackers have four primary attack methods. These are phishing, routing, Sybil, and 51% attacks.

• Phishing is a scam to attain a user’s credentials
• Routing attacks happen during large data transfers
• Sybil attacks are where hackers create and use a multitude of false network identities to crash systems
• 51% attacks mean that a group of miners controls more than half of a blockchain network’s mining power and is therefore able to manipulate it.

Playing catch-up

The other significant issue surrounding blockchain is that while it can enhance online security for crypto casinos or online casinos that accept both cryptocurrencies and fiat currencies, not all online casinos operate within the crypto environment. Despite an increasing acceptance of cryptocurrencies, they are still on the fringes for many people. Those who are passionate advocates of crypto might not understand the majority’s skepticism, but the fact that they are not universally accepted means that blockchain cannot be a one-size-fits-all solution to casino security.

However, it should be understood that blockchains can be utilized in any industry to make data immutable, thereby reducing the need for trusted third parties and human intervention, and potentially minimizing mistakes.