Shifting Towards Decentralised Sportsbook

Several multi-million dollar crypto sportsbooks heists were reported in July 2023, the most notable of which were the $37.3M hack on CoinsPaid and the $23M Hack on Alphapo Wallet.

As the world moved on from these unfortunate incidents ,the world's largest crypto casino, Stake․com was reportedly hacked for $41.3 million two months later.

It is evident that the number of hacks suffered by crypto platforms is steadily on the increase, earning crypto an image problem. Meanwhile, the question everyone is asking is what makes crypto platforms vulnerable to these hacks. The answer is not far-fetched.

The integration of cryptocurrencies has brought convenience and speed to the sports betting industry, but the lack of robust security measures has made these platforms prime targets for hackers.

Two major hacks involving crypto payment processors have sent shockwaves through the online gambling community, prompting questions about the safety of sportsbooks that use cryptocurrencies without smart contracts.

CoinsPaid, a prominent crypto payment platform catering to various online casinos, found itself grappling with significant disruption. Withdrawals were suddenly suspended, leaving users puzzled and concerned about their funds.

In a separate but related incident, Alphapo, another crypto payment processor utilized by online casinos, suffered a severe hot wallet hack. The hackers made away with at least $60 million worth of cryptocurrencies, including Ethereum, Tron, and Bitcoin.

Among the affected platforms was HypeDrop, a customer of Alphapo, which had to disable withdrawals due to issues arising from the hack.

Alphapo and CoinsPaid shared commonalities in their operations, serving various online casinos and experiencing substantial financial losses.

Speculation arose about possible connections between the two incidents, with experts suggesting that a single group of hackers might be behind both attacks.

Crypto researcher Zachxbt speculates that the Lazarus group may be behind this, "The issue is you got hacked by North Korea that's what lol". Is there any concrete evidence to support Crypto researcher Zachxbt's speculation? While there hasn’t been concrete proof, it is important that the vulnerability exists in web2 crypto betting.

A glaring factor in these hacks is the absence of smart contracts in the payment processes. Smart contracts are automated, self-executing agreements with predefined conditions that trigger actions when those conditions are met.

Incorporating smart contracts into crypto payment platforms can significantly enhance security and minimize the risk of large-scale hacks.

From the above, the several key take-aways are that sportsbooks can use smart contracts to automate payment processing, reduce the risk of human errors, implement multi-factor authentication to verify user identities using third party resources such as Gmail and AWS.

Hence, some of the best safety measures are using cold wallets, like Ledger, that are not connected to internet, conducting regular security audits to identify and address vulnerabilities, and staying informed about the latest cybersecurity threats and trends in the industry.

While crypto hacks raise a lot of concern over the security of crypto platforms, they are not the end of the world for the punters out there. There are decentralized smart contracts that leverage immutable code, automated securities, and trustless .

An example is ubetsports.io , a decentralised sports betting platform that democratizes traditional crypto sportsbooks, where the entire betting transaction happens on the blockchain.

This makes it nearly impossible to alter, ensuring tamper-proof betting payment protocols, reducing the need for manual intervention, and being non-custodial.

A key reason why UBET Sports qualifies as a typical example of decentralisation in sports betting is that it allows a routine audit of its smart contract by Resonance Security, a web3 security concierge.

The importance of running an end-to-end security review can't be overemphasized simply because it helps to better address potential security breaches that may arise from a smart contract code and it also enables it to stay on the security curve long after the audit has been completed.

Additionally, in the world of web3 sports betting, users should dedicate increased time, effort, and resources to fortify their cybersecurity. With the shift towards digitalization, cybersecurity takes on even greater importance as a top priority and legitimate concern for users.

It's essential for users to consider employing hardware wallets to ensure the protection of their valuable blockchain wallets.

The convergence of sports betting and cryptocurrencies is clear and it is rapidly reshaping the industry. The sports betting industry must prioritize robust security measures, conduct regular audits, and stay informed about the latest developments in cybersecurity.

By learning from these unfortunate incidents and leveraging innovative technologies, sportsbooks can continue to embrace cryptocurrencies while safeguarding their platforms and protecting their customers' funds. The urgency to strengthen security practices is clear, and the industry must act decisively to safeguard its future.

Conclusion

In short, the sports betting industry is at a crossroads. It can either continue to use outdated security measures and risk being hacked, or it can embrace new technologies and make its platforms more secure. The choice is clear.