Explained: Crypto lotteries and how they work

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Conventional lotteries are brimming with mistrust, riddled with unwanted fees and often lead to unsatisfactory customer experiences. Blockchain technology serves as an effective solution for these problems and can transform the lottery system as we know it. Let’s find out how this is possible.What is a crypto lottery?A crypto lottery resembles its traditional counterpart in many ways.

In both, you purchase a ticket with a serial number on it. Then, a number is randomly picked, and the ticket with the serial number closest to it wins. However, there is one main difference — crypto lotteries use cryptocurrencies instead of traditional fiat currency.How does blockchain solve issues faced by current lottery systems?-Fairness: When it comes to lotteries, fairness is a critical component of the game.

However, traditional lottery systems struggle to harbour a spirit of trust within the community. Fortunately, the public, yet, secure ledger of a blockchain can bridge this gap. Information about the lottery becomes available to all, and transparency is restored in the system.Also Read: Explained: Eclipse attacks on blockchains and how to stop them-Reliability: The second challenge faced in the lottery industry is the disbursement of funds.

Generally, 50 percent of the proceeds from ticket sales are added to the cash pool, which becomes the jackpot for the winner. However, players can’t know where the money is being directed, which is what causes all the mistrust.However, with a blockchain-based system, the total amount arising from the sale of tickets is visible to all. Moreover, smart contracts on blockchain lotteries guarantee that the right amount is delivered to the right person at the right time with complete security.