Cryptography and [Illegal] online casinos.
May. 7th, 2009 11:07 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
izardI've been doing some crypto system tuning few weeks ago and it came to my mind that the same approach could be used to solve one of the problems online casinos are facing.
Goes under cut as it's a bit technical
Alice - online casino, Bob - gambling addict, Catty - State.
Alice's goals - Do not let Bob cheat, do not let Catty interfere.
Bob's goals - Do not let Alice cheat.
Catty's goals - regulate and tax Alice.
There are 3 ways for Bob to make sure Alice is not cheating - ask Catty (traditional), gather (independent) statistics (this requires resources Bob does not have, and being fair in past does not guarantee being fair in the future), or use his own random number generator (Alice would not like it).
Alice can make sure Bob is not cheating by using her own random number generator. Then Bob has to demand that Alice is being audited by Catty (certification, having a legal corporation entity, etc), Alice does not like this but has to comply.
There is a crypto solution that works this out. There is a protocol (and more then one), that lets Bob use his own random number generator, and make an assurance for Alice that Bob is not tampering with it.
Catty goes out of business. Bob can use any online casino, even one without license, not incorporated, etc. Roulette is effectively located in Bob's home, and he's spinning it by himself without a croupier, so he can trust Alice. Alice is just a source of liquidity, and on average, she wins as any casino does. But unlike any casino, there is no incentive to share income with Catty, so Alice can lure more customers by increasing the winning rate.
Upd: That was actually a bicycle-reinventing excercise. Casinos that want ppl's trust just pre-publish md5 checksums of future random numbers series, that's a bit simpler then implementing a protocol I've invented.
Goes under cut as it's a bit technical
Alice - online casino, Bob - gambling addict, Catty - State.
Alice's goals - Do not let Bob cheat, do not let Catty interfere.
Bob's goals - Do not let Alice cheat.
Catty's goals - regulate and tax Alice.
There are 3 ways for Bob to make sure Alice is not cheating - ask Catty (traditional), gather (independent) statistics (this requires resources Bob does not have, and being fair in past does not guarantee being fair in the future), or use his own random number generator (Alice would not like it).
Alice can make sure Bob is not cheating by using her own random number generator. Then Bob has to demand that Alice is being audited by Catty (certification, having a legal corporation entity, etc), Alice does not like this but has to comply.
There is a crypto solution that works this out. There is a protocol (and more then one), that lets Bob use his own random number generator, and make an assurance for Alice that Bob is not tampering with it.
Catty goes out of business. Bob can use any online casino, even one without license, not incorporated, etc. Roulette is effectively located in Bob's home, and he's spinning it by himself without a croupier, so he can trust Alice. Alice is just a source of liquidity, and on average, she wins as any casino does. But unlike any casino, there is no incentive to share income with Catty, so Alice can lure more customers by increasing the winning rate.
Upd: That was actually a bicycle-reinventing excercise. Casinos that want ppl's trust just pre-publish md5 checksums of future random numbers series, that's a bit simpler then implementing a protocol I've invented.
