How Blockchain Technology Can Help Online Casinos with Identity Management
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Identity verification is integral to many services, especially those involving money. If you have a bank account, you know the KYC (Know Your Customer) verification process and how it contributes to the Anti-Money Laundering (AML) fight.
For legit online casinos, the same is true. “Legit” is the keyword here, as not all casino operators are trusted, and not all genuinely care about their customers. There are trusted casinos that you may find among the best no verification casinos on TheLostGamer in 2023 that are highly recommended.
It is sensational to think of no-verification casinos, but the technology world is moving in a direction where alternative identification methods will take precedence over the usual KYC process. Blockchain happens to be at the forefront of this revolution.
In this post, we’ll look at how blockchain technology could change identity verification forever.
What is Identity Management?
Identity management is the process, policies, and technologies to ensure that only authorized people can access the resources and services offered to customers. In our context, it’s about access to online casino resources and services.
Although standard identity management processes like Know Your Customer have been proven fruitful for businesses, they have their fair share of downsides. Data breaches are undoubtedly one of the most significant issues with centralized procedures like KYC implementations.
Then there is the risk of fraudulent documents that slip through the cracks. It’s simply because a human is responsible for manually cross-checking the documents. And we all know that humans are liable to error.
That’s where blockchain technology comes to the rescue. A public blockchain is a decentralized distributed ledger that tracks, records, and verifies all “transactions” on a public ledger. A transaction for a blockchain is not limited to financial transactions only. Submitting a document is also classified as a transaction.
How Blockchain Verifies and Records Transactions
The main selling point of blockchain technology is “decentralization.” In simple terms, a blockchain network is not centrally operated. All the network participants must “agree” for an operation to go through.
The agreement is reached with a consensus algorithm. Although there are different consensus algorithms, the most popular ones are Proof of Work (PoW) and Proof of Stake (PoS).
To put identity verification in context, imagine uploading a copy of your ID on the blockchain. Now, all the network participants review this transaction and “agree” that it’s valid. Once an agreement is reached, your document is permanently recorded on the blockchain.
In case you don’t know, blockchain transactions are immutable. It means it can’t be modified or deleted once it’s recorded. This also means that you can no longer upload any other version of the same document. The same goes for hackers or scammers trying to pretend to be you.
It is encouraging to know that more and more casino operators are gradually adopting blockchain integration with their services, especially as it can also help in implementing low-risk gambling with their services. The more operators use blockchain for identity management, the stronger this technology will become.
Blockchain Verification is Faster than Any Other Methods
One of the main reasons we’re strong advocates of blockchain identity management is that it’s faster than any other existing method. It’s a fully automated process that only depends on network congestion.
The downside, however, is the cost. In most cases, you have to pay for the transaction processing. If there is too much load on the network, the fees can skyrocket.
Other Alternatives to Identity Verification at Online Casinos
Blockchain identity management is the best alternative to the traditional KYC process. But it’s not the only valid alternative. Below are some identity management methods that are currently in use:
Most modern smartphones come with biometric scanners these days. You have the usual fingerprint scanner as well as facial recognition.
You may have experience with various platforms asking security questions like “What’s the name of your first pet? Or what is your mother’s maiden name?.” These are examples of KBA verification.
Two-factor authentication, or 2FA, is widely used for low-level security requirements like your Google or Facebook accounts. Operators can also use this to verify a casino account.
Wrapping Up
Identity theft is a significant crime, and the online gambling industry is as vulnerable as the banking sector. By simply using blockchain to manage identities, online casino operators can offer more robust security that sheds off the bad actors and provides an all-around secure service to their customers.
