Understanding ‘Provably Fair’ in iGaming

IGaming began its development in 1994 when the first online gambling site was created and the world’s first online casino license was issued. Today, the volume of this market is already $88.33 billion, and with a growth rate of 10.57%, it is projected to almost double to $161.32 billion by 2030.

Such widespread adoption has been facilitated by a combination of factors such as:

• the growing number of smartphone users (according to Whatsthebigdata more than 7.1 billion people in 2024);
• the large selection and rapid development of online websites, platforms, and mobile apps;
• application of VR/AI to improve user experience and greater engagement in the game;
• integration of new IT technologies into service systems, simplification of payments, and allowing transactions in cryptocurrencies.

But, IGaming faced the problem of how to prove the honesty of online gaming. After all, when betting in a regular/offline casino, the client sees the roulette and watches the dealer. At the same time, in online casinos, the user sees only a picture on the screen, what is embedded in the system, and how it works, remains only a guess. Blockchain and smart contracts have helped to solve this problem, which became the basis of Provably Fair (PF).

Provably Fair (PF) is a cryptographic technology that guarantees the game’s fairness for the user and the transparency of the gambling platform. Using an encrypted, cryptographic key, the participant can verify the code with the result (win or lose) and make sure that there is no third-party interference, making any changes during the game.

It is important to remember that a provably fair system confirms the transparency of the entire process and the reliability of the result obtained, but is not a guarantee of safety of funds on deposit or security of user data. For this purpose, it is necessary to check if the provider has a license.

Provably Fair: What Is It?

Proof-of-Fairness (PF) technology is used to confirm the reliability of the gambling provider, to ensure that there is no manipulation, to provide the same conditions for all participants, and to verify the outcome. Participants, after each round, can receive an encrypted key and check, at any time, the result (with all recorded changes if any).

This suggests that games using provably fair algorithms are becoming very popular. Many entertainment platforms separately create entire sections for PF games. On the BGaming website it is indicated that 2 games with PF technology were among the top 3 GGR games for 2019-2020.

The history of using PF started in 2017 when a white paper was presented as a technical document. Then it started to be used in-game types such as PvP, and PvH.

How Provably Fair Technology Works?

PF was based on the same SHA-256 encryption algorithm (any data is turned into a 256-bit hash value) as in the Bitcoin network. For the operation of online casinos, the use of PF confirms that the result is not affected by anyone and nothing. The system guarantees a fair outcome, no manipulation.

How does it work provably fair meaning:

• The IThe gaming platform generates random numbers from which a unique Server Seed value is obtained. Until the moment of betting, the player has access only to the hash of this number, which has been encrypted using the SHA-256 algorithm. This is the secret key, which will then help confirm the result.
• The Client browser then hashes also a randomly generated number – Client/Player Seed.
• During the game, algorithms using these two values determine the result (each round has its unique outcome).
• At the end, the participant receives a Server Seed and with the help of Client Seed the information about the bet at the moment it was made is decoded and the validity of the whole process is checked.
• If the codes match, the outcome is indeed true.

Principles of PF application:

• The result of the game must be random and have an open code to decrypt the final value.
• The result is predetermined but is not known to the player or the platform until completion.
• The outcome is shaped by player (third-party) participation.

The process of checking the outcome of the game takes up to 10 seconds, usually, platforms provide decryption tools, although each participant can use their hash calculators. If there are changes to the initial bets, after the bet has been placed, then when decrypting the data, the user will get a different result from the original.

The Meaning and Impact of Provably Fair for iGaming Operators

For online casinos, the use of PF is particularly relevant, as players have little trust in random number generators. They have a certain skepticism about this system. The idea of using cryptography to confirm the result, and impartial treatment of any player, played in favor of all participants in the process.

By integrating provably fair gambling, online casino operators can:

• Strengthen customer trust, and demonstrate 100% transparency of the game and its result, which can always be double-checked.
• To increase user loyalty, online providers can increase profits by up to 20% due to user trust in the platform.
• Reduce the number of inspections by Regulators and the cost of audits as blockchain technology is utilized.
• Increase the use of cryptocurrencies (deposits can be made in one of the virtual currencies without disclosure of data). Bitcoin is popular in all crypto casinos.
• Protect users’ assets. Some platforms offer “cold asset storage”, which serves as an additional factor to protect customer funds.
• Use innovative technologies that ensure the high quality of the entire competitive process, quick winnings, and betting.

With the use of blockchain technologies iGaming platforms have proved 100% transparency of the game, and equal chances for all players, which of course increased the trust of participants, influenced the expansion of business relations with the IT sphere, and helped to improve the online product. Online casinos are especially popular with the crypto community who know, trust, and have been using such hashing systems for a long time.

Provably Fair Algorithms

PF technology is easy to integrate into a system. Gambling operators who want to confirm high standards in their industry will always use it, rather than looking for excuses for not using it. In time, PF games will become the norm rather than a rare occurrence on sites.

The algorithm is provably fair crypto casinos are used to create a unique code (hash) from the entered data of the participants and the generated numbers of the platforms, which will later serve as proof of the fairness of the game. In the hash can be encrypted the outcome of the card competition (order of cards), the position of the drum, the selected bets, etc. This concept has already changed the working principles of many gambling operators, bringing their activities to a new level of customer relations.

Key Components of a Provably Fair System

The key components of PF that are behind the integrity and security of the technology:

• Client/Player Seed – this is the player’s code, which the player can choose or generate by the platform.
• Server Seed – the code generated by the server and not available to the client to avoid manipulation.
• Nonce – a number that changes when betting, serves to ensure the uniqueness of each round of the game.
• SHA-256 – a hash function that encrypts the data.

These elements combine to create a system of trust for all participants, regardless of what type of game they are used for duel gambling provably fair, Bitcoin dice games, or Blockchain lottery.

Introduction of a Provably Fair

In practice, what is provably fair consists of several steps:

Step1. Calculation before the game starts.

The result is calculated and a string (Secret) is generated for each round.

Step 2: Hashing.

SHA-256 hashes the Result+Secret and is passed in an encrypted format to the player.

Step 3. The player enters his value (bet).

Client/Player Seed is entered by the player, which affects the game process but does not determine the outcome.

Step 4: Checking the result.

Once the process is complete, Result+Secret+Final Result becomes available to participants. Users can decrypt the data both on the platform and using separate online services.

Practical Application in Games

The algorithms are often used:

• for online casinos (roulette, slots, poker). According to the analytics, the online casino market was estimated at $61.55 billion in 2022, and in 2032 it should already reach $105.77 billion. Such new approaches in the field of entertainment contribute to the inflow of new customers, increasing trust, and growing popularity;
• dice games with Bitcoin, especially prevalent among cryptocurrency enthusiasts who can verify the results of each throw;
• lotteries, with the introduction of blockchain, the verification process for online lotteries, proving the result to the customer has become faster and easier.

What distinguishes PF games from others are the tools with which the player can verify the final result, and the absence of rigging, and third-party interference.

Is Provably Fair Hackable?

PF is implemented to ensure two key criteria – integrity and transparency – but the question arises, “Can the system be circumvented? Is the technology that reliable?”.

It is currently impossible to break or cheat PF technology because:

• Server Seed – the only way to break and learn SHA-256 encrypted data is to use a quantum computer, which does not exist yet.
• Player Seed – in addition to protecting the entered values, the server protects the user’s data.

For IGambling operators, the use of PF is about building a solid reputation in the market, increasing user trust, and long-term retention on the platform. The tools that PF provides allow players to see for themselves that the game has been played fairly without anyone making changes. The integration of PF with the world of gambling has brought new opportunities for online gambling and improved the interaction of participants with market operators.