What is SP8DE?
Sp8de is a protocol for blockchain-based platform with multiple features that are essential for the growing blockchain gambling industry and whose solid implementation is lacking in any of the currently existing projects in this space.
We know that Sp8de will change the future of online gambling. This program is focused at informing the wider cryptocurrency and gambling of our project. By taking part in the Bounty Program you will get a share of the project’s tokens by executing several promoting campaigns for Sp8de.
We will allocate 2% (or 177,777,777.76 SPX) of the Sp8de tokens to this program. In the following text we will describe our bounty program and we will be happy for everyone who exhibits interest in Sp8de.
ICO Start: January 8, 2017; 10:18 AM GMT
ICO End: March 11, 2017; 10:18 AM GMT
Welcome to Spade, a blockchain-based platform capable of supplying unbiased public randomness for developing and running distributed casino applications. Spade is designed to suit the purposes of all the actors comprising the online casino landscape and as such represents the new breed of digital institutions, a distributed intermediary.
The spark that lit this project and continues to inspire us now, is that early blockchain and Bitcoin casinos simply didn’t get it right. The Blockchain community was younger and wilder, ideals of distributed freedom were burning brighter… still, early adopters who applied blockchain technology to gambling promoted the wrong ideals; those undermining the image of decentralized casinos. Instead of promoting transparency and cost efficiency that characterize blockchain technology, they promoted anonymity and cyber anarchy. Instead of making the casino for everyone, they kept it to themselves.
By no means are we here to judge. Instead, we are here to change. We do not say that old ways are bad, but can prove that new ones are better. We hold faith in the decentralized future and appreciate the charm of gambling.
We soon realized that there is only a fragile wall of glass between the old centralized gambling and the future global distributed casino. This is it, a simple yet captivating idea. The future is here: we can run a zero-house edge decentralized casino with close-to-zero transaction fees and provably fair random numbers feeding entropy into a myriad of Smart-Contract-based open source casino applications that can be developed by anyone who has a worthy idea by means of state-of-the art application-specific as well general-purpose programming languages. “We can” was the silent voice of the idea. Now it is the marching echo of “we do”.
As it frequently happens, technological progress made a massive leap forward that went unnoticed by the majority of human kind: people still prefer the traditional narrow-minded and boring online casinos that set draconian house edges and cannot be proven fair. Once again, no one has the right to judge: it is just an existential business need, produced by a dilapidated business model and an inch of greed.
Worse than this, however, is that even the enlightened ones, those chosen to witness the dawn of the distributed world have noticed a perfect fit between distributed consensus protocols and gambling applications, have synthesized them and… nothing. Some of these projects got infamous due to money laundering accusations, some have spoiled the beauty of the idea by running centralized online casinos and simply allowing for cryptocurrency deposits, others got their moments of fame during TGAs, today, however, few can recall even the names of these projects. Of course, there are some notable exceptions to this rule, but while succeeding locally all these projects have failed to create awareness.
None of them has broadcasted the essential message: “There is no glass wall; the future of gambling is now; we are better in every single quantifiable aspect; if quantifiable is not enough, we also have the powerful idea of the distributed future, while those who are stuck in the past have only a couple of servers and an unaudited poker protocol”.
We will do what no one has done before. Spade is a blockchain-based platform for developing distributed gambling applications. As a platform for gambling applications with self-respect, we are equipped with the protocol for generating fresh unbiased public randomness. As a team with some aspirations we have it provably fair and completely decentralized.
We feel that it is important to be true to the spirit of the venture we embark upon: if blockchain is the universal and undisputed source of truth then it should also be the broadcast channel for randomness. We think that single points of failure should be perceived by anyone as just a relic of the past.
This feature, while setting us aside most starkly, is only a part of what we have to offer in terms of technological stack. In what follows we will dive deeper into the revolution we all are a part of and will explain in detail the best
iGaming protocol the world has ever seen.
In the European Union the online gambling industry grew nearly 19% from the first half of 2015 until the first half of 2016. The casino industry in particular generated over US$2 billion in revenues during this period. It is
expected that until 2020 this number will reach US$2.25 billion per year representing about 12.5% revenue growth . In the US for the period 2015 until 2016 online casino revenues increased by 24.4% and are expected
to reach US$4 billion by 2020 . The EU and the US are just a small part of the worldwide casino industry. Globally, the projections of the online casino show that for the period 2017–2025 the market will experience growth of about 130% reaching US$97 billion with cumulative annual growth rate of nearly 11%. Currently over 6 million adults are officially participating in gambling activities around the world with projections of reaching 10 million by 2020 .
Since inception, the blockchain technology was the subject of close attention by gambling enthusiasts. Recent news from The Merkle  show how popular online Bitcoin betting has become. In aggregate the wagers put on online Bitcoin casinos in February 2017 have reached nearly 3 Bitcoin per minute. The price of Bitcoin at the end of February was about US$1,200 while now it is US$5,900 (approximately 292% growth) which means that as of today almost US$715 million worth of Bitcoin was gambled in February alone.
In Figure 1 we show how an investment of US$1 would have developed from 2010 until 2017 if it was invested into the giants of the online gambling industry1  as compared to the same dollar being invested in Bitcoin. Apart
from the fact that this investment in BTC would have provided US$70,502 as compared to only $US7.37 when invested in the index, one major observation can be made: the shaded areas show that as the Bitcoin blockchain technology was becoming more and more popular (that is the price of Bitcoin was rising) the traditional online casinos have also gained steam. However, when we look further in Figure 2 (Google Trends search for “Bitcoin Casino” and “Online Casino”) we see that the popularity of online casinos has been relatively stable and slowly declining since 2004. Only since the beginning of 2016 when the Bitcoin casinos have started to gain wide popularity did the online casinos see slight increase in interest. In addition, the search “Bitcoin Casino” has
skyrocketed since May 2017 when it surpassed the search term “Online Casinos”. Furthermore, we know of the existence of at least ten relatively sound blockchain-driven casino projects that have entered the industry
through a successful TGE and are still being developed. Although somewhat broad2, this overview points out to an important pattern which holds a lot of relevance for the future of the gambling industry.
Currently, online casinos seem to be only weakly affected by the growth in the interest in Bitcoin gambling and the blockchain-based casinos that at the moment appear to at least complement traditional online gambling.
However, this is happening at a staggering pace and the tendency shows a possibility of blockchain-based gambling taking over online casinos. If the current pace of technological advancement of the blockchain industry is sustained, soon there will be no benefits left for the consumers in the more traditional online casinos.
1.To form this index, we create an equally-weighted portfolio of 888 Holdings, bet-at-home.com, GVC Holdings, Ladbrokes Coral Group, and MGM Resorts (although Bitcoin is traded during the weekends and holidays we only consider trading days).
2. When replacing “Online Casino” with “Online Gambling” the results are similar. Also replacing “Bitcoin Casino” with “Blockchain Casino” does not alter our results significantly. The results of searching “Ethereum Casino” are also similar to those of searching “Blockchain Casino”. Nevertheless, one has to consider that it is possible that people searching these keywords did not look for actual blockchain-based casino but rather that they want to gamble cryptocurrency such as Bitcoin.
The Blockchain and the Casino
In what follows we describe a protocol for decentralized blockchain platform for developing casino applications with multiple unique features whose solid implementation is lacking in any of the currently existing projects in this space. The concept of decentralized consensus that lies at the heart of blockchain is based on the smart application of cryptography and game-theory. Combined, they create the economics of trust and hold immense
potential for revolutionizing many classic industries.
This backbone of blockchain technology renders it an obvious candidate to consider in developing online gambling applications as, arguably, trust considerations and the need for transparency are — and always used to
be — two major cornerstones of the gambling industry , , , . In particular, blockchain has the potential to provide transparency to all transactions, drastically reduce the house edge, nearly eliminate transaction
costs, ensure anonymity of participants and ultimately, create the trust among players and other industry participants. This rapidly evolving technological stack offers immense potential for improvements in the online gambling space, however, it also carries multiple new pitfalls that are scarcely (if at all) researched and poorly understood. To understand the benefits the blockchain brings, one needs to delve deep in the economics of casinos (the institutional viewpoint). Appreciating the challenges requires an overview of the mechanics of the blockchain technology.
So, why would applying blockchain to online gambling appeal to an average person?
Economics of Gambling: An Institutional Perspective
While being driven throughout its long history by complex economic and sociological changes, the gambling industry has dramatically changed its competitive and institutional landscape — on the supply side it has changed remarkably little from the perspective of a person who wishes to try one’s luck. Indeed, it is still the same set of games that dominates the casino landscape, it is still the chance that defines one’s faith and these are still the classic transaction costs that interfere into the process, owing to the fact that the world we live in is not frictionless.
It follows that we can view the casinos from the perspective of institutional economics, a branch of economics studying the impact of institutions on the behavior of economic actors.
One of the major roles the financial institutions play, in modern economics, is economizing on transaction costs, thereby facilitating financial transactions that would otherwise be unfeasible. They also serve as escrows, notorious trusted third parties, who facilitate trust among the participants allowing them to enter into an exchange more efficiently than would otherwise be the case .
In this vein, casinos act as “gambling” intermediaries realizing the economies of scale, maintaining order and quality of service, thereby facilitating the “conditional” transactions — bets.
Let’s imagine the evolution of the gambling industry as a path towards reducing the transaction costs where innovative industry newcomers attempt to take a piece of the overall pie from the old incumbents by bringing gambling closer to the frictionless ideal.
In this vein, classic casinos reduce security and search costs, facilitate standardization by using chips and having house rules and, most importantly, realize economies of scale by bringing together people united by the shared
desire to gamble. Following this line of reasoning, online casinos while performing the same functions as their classic brick-and-mortar counterparts, also facilitate convenience and economize on the travel costs on the side of players. The major reason for their existence, however, stems from their more lightweight cost structure that is characterized with virtually zero marginal cost of adding a new client. This translates into significantly lower overhead costs, results in smaller house edge and, therefore, smaller average wagers and larger average net gains on the side of the clients , .
The advent of the cryptocurrency casinos came as a result of their anonymity feature as well as absence of any regulatory oversight. As many other applications of the blockchain technology in its early days, the major
considerations behind setting up casinos on the blockchain were idealistic, impractical or outright shady in nature. The anonymity and laissez-faire regime, however, are not the features that fit best into our line of reasoning: indeed, the decentralized infrastructure does not imply any server maintenance costs: the protocol is autonomous; the bets are fair: the protocol code is public; its workings are imprinted into the immutable
ledger forever and can always be verified by anyone.
As a rule, once something new offers better ways for solving old problems, there always is a catch
The Mechanics of Spade
Spade is the new-generation blockchain-based gaming platform aimed at all the participants of contemporary casino ecosystem. We call it “new generation” as Spade satisfies all the aforementioned conditions of a ‘proper’
blockchain casino. We build Spade on top of the blockchain called Cardano . The Cardano project itself is a monumental work that embraced the best practices and most far reaching innovations in the area of cryptocurrencies and packed them into a single state-of-art system. It is being developed and maintained by a large team comprised solely of PhDs in the field of programming and cryptography, and experienced engineers.
In what follows we will illustrate how Spade provides an environment for the design of gambling applications which are characterized with:
- Close-to-absent transaction fees and Proof-of-Stake powered scalability that is beyond the reach of any other on-chain casino protocol currently in existence;
- A mechanism to generate decentralized provenly uniform randomness at arbitrary time-spans;
- Provides rich Smart Contract functionality that allows for creativity in game design that is bounded solely by the fantasy of the developer (and the demand for the resulting product of course);
Fairness of the outcome is essential for gambling; it is the core.
Spade utilizes Cardano to design its ecosystem and thereby solves the problems normally associated with the on-chain casinos described above. Here is how:
Transaction fees and scalability: the size of transaction fees is normally a function of the degree to which a given distributed system scales. Scalability can be defined as the relation between system resources and the number of nodes. Scalable systems gain in efficiency as new nodes join the network:
BitTorrent and IOTA protocols are two prominent examples. Proof-of-Work based blockchain systems do not scale by construction: indeed, maintaining a common ledger implies every node possessing a full copy of this ledger.
Without this condition, the security — most important property of such systems — is compromised. Therefore, there is no gain in efficiency when a new node joins the network. Ouroboros is a Proof-of-Stake protocol, meaning that at any given time, a trusted set of nodes maintain the integrity of the system. This protocol was shown in an experimental setting to be resistant to a handful of attacks that are known to plague other systems and are directly relevant to gambling protocols.
Random number generation: finally, Ouroboros, the POS protocol underlying Cardano blockchain in its workings fully relies upon generating unbiased (i.e. uniformly distributed) entropy. The beauty of the idea is that the blockchain itself serves as a broadcast channel: the uniform randomness is generated on-chain! For us, this is the crucial point, so let’s elaborate on it further.
POS systems are heavily dependent on the ability to generate good-quality randomness “to inject pure entropy into the system”. Without it, the integrity of the protocol can be interrupted. This stems from the fact that if there is a way to manipulate the process of selecting an agent who is chosen to validate the next block, an adversary can bias the election process. This is the root of the infamous “Nothing-at-Stake” problem and invalidates the whole concept of POS-based distributed consensus protocols. Apart from provably random number generation, another pre-condition for the plausibility of POS protocols is that these numbers are actually delivered to everyone participating in the protocol.
In other words, the delivery of uniform randomness has to be guaranteed on the protocol level. Hence,to be a valid concept, especially from a formal academic viewpoint, Ouroboros must have a mechanism for generating and broadcasting “good” randomness. Furthermore, to be scalable, the generation and verification processes must be computationally inexpensive.
Ouroboros solves these problems by embracing two well-known protocols from the field of distributed consensus: coin-tossing application of commitment schemes and verifiable secret sharing. Blending these two together produces a miracle: it creates a protocol for creating unbiased public randomness in a distributed adversarial setting with guaranteed output delivery. In layman terms, this means that Ouroboros:
1. Generates provably random numbers;
2. Guarantees that everyone will get them. Unchanged.
We will touch upon the topic of randomness again in the technical deep-dive below. Apart from providing elegant solutions to the existential problems of on-chain casino protocols, Cardano offers a rich toolbox for solving several less critical issues:
3. Flexible and finance application-tailored scripting language: those who have experience with the Bitcoin scripting language know how draconian and inflexible it is, those who spent thousands of hours grinding through Solidity (the Ethereum scripting language), know how quickly it might become overly
complex. Rigidity limits the number of applications; complexity limits the set of actors who are capable to work with the language and introduces larger scope for unintended errors and unnoticed bugs. To create a truly universal platform where those with bright ideas can compete for their share in the overall pie, one needs a simpler language whereby, simplicity would not come at the expense of the scope of application. Plutus is a general purpose Smart Contract language developed by IOHK and implemented in Cardano.
The core idea is that any type of financial transaction can be decomposed into simpler ones. Therefore, all the wide variety of complex financial instruments is comprised of a much smaller set of “foundational elements” that create the entire transactional logic. Cardano is designed by matters of code and is set to follow best practices; its scripting language is tailored for financial applications: security and execution can be “extremely well understood”.
With a certain degree of abstraction, one can observe strong parallels between any financial derivative and most of the gambling applications: in essence these are just contracts between one or more parties where outcome is conditioned, in part, on a realization of a random variable. This leads us to conclude that Plutus is the best of kind natural fit for writing casino applications.
Cardano is scalable, secure, and complex yet elegant. The major takeaway is that designing a successful POS protocol requires solving the same problems that constrain the creation of provably fair on-chain casinos. With Cardano as a backbone, Spade is set to become the best of its kind.
Our claims don’t require you to blindly trust us: all the results we rely on are proven with academic rigor and can be accessed by anyone on the ever-growing library of academic papers maintained by the IOHK foundation.
Our competitors can appeal to the crowd stating that their protocol is unique, efficient and practically difficult to manipulate. Believing this implies having faith in their team: all the existing projects are either work-inprogress or completed, but centralized. All the results we rely upon are established with mathematical rigor and academic formalism by those for whom developing cryptography as a science is a profession, and state of the art code is an everyday tool.
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