The 3 Pillars of Blockchain

Blockchain and its related native assets have entered the mainstream. Even for those not in an industry using or looking into using blockchain technology, that is made apparent by ad campaigns coming from companies such as Turbo Tax, or the endless ads from Crypto.com featuring Matt Damon. Unfortunately, most people are still unacquainted with blockchain technology and think blockchain equals cryptocurrencies. While we have previously written about the differences between blockchain and cryptocurrency, we wrote this short article to cover the 3 pillars of blockchain technology.

At its core, blockchain is structured around three pillars: decentralization, scalability, and immutability.


In a decentralized system there is no central authority. Decisions are instead made through consensus, for more information on consensus and other terms related to blockchain you can view our glossary here. When it comes to blockchain, this is done through a network of nodes. This type of system creates a trustless environment, where no one needs to trust another since every member of the network has the exact same data – and any attempts to alter the ledger will be rejected by the network. Without decentralization it would not be possible for immutability, because in a centralized system there is a single point of failure and the centralized authority would have the power to alter records.


Scalability is essential for any technology that plans on being widely adopted. When it comes to blockchain, scalability refers to the speed at which a blockchain is capable of processing transactions and the cost of processing those transactions. Scalability has been seen as a major issue for blockchains for many years. Two notable examples are the slow confirmation speeds for Bitcoin transactions and the expensive fees on Ethereum transfers.

Layer 2 blockchains are being developed to improve scalability. Layer 2 blockchains are built on top of the existing architecture of layer 1 (or “main”) blockchains. These layer 2 blockchains feature significantly reduced transaction fees and faster transaction processing. As an example, the Lightning Network and Polygon are respective layer 2 blockchains for Bitcoin and Ethereum. For more on layer 1 and layer 2, we have a detailed infographic available here.


Blockchains are immutable because the data that is recorded on the respective blockchain is irreversible and cannot be altered. If a transaction is conducted, the transaction details will be logged on the blockchain and can be publicly viewed in perpetuity. This is possible due to the decentralized nature of blockchain. Since the records cannot be altered, this means that any data – whether it is a receipt for a transaction, a vote, or a property deed – can be trusted to be accurate.

Why is blockchain important?

These pillars enable blockchain to serve as public ledgers that provide the ultimate security in record keeping. While record keeping may sound boring and not a huge technical achievement, it has empowered software developers to create self-executing digital contracts that will power the Internet of Things (IoT) and the metaverse, provides artists and brands the ability to claim definitive proof of ownership of their assets, and allows for data to be publicly accessible while retaining privacy. The next phase of the internet, commonly referred to as Web 3, is built on blockchain technology. This means that even skeptics or those indifferent to the technology will be utilizing it.

In regards to privacy, one may ask how a publicly accessible ledger, where every transaction or record is easily searchable, could possibly be private. This is possible through tokenizing identifying or sensitive information while the aggregate data is still publicly accessible. One example of an important use case for this is healthcare, where having accessible data is crucial for research, but where it is also imperative to protect patients’ identities.

How is blockchain technology related to iGaming?

Bettors can be hesitant to try out new casinos and sportsbooks when they don’t know if they are playing a fair game or if a winning bet will even be paid out. Even the largest operators have at times denied or withheld payouts to players for a variety of reasons, such as claiming a game malfunctioned. Blockchain technology has created an opportunity for operators to improve player security, ease the KYC process, increase the trust of an operator’s brand, and eliminate fraudulent transactions. This is all facilitated through the use of smart contracts, and we call this on-chain wagering.

When a bet is placed on-chain, the bettor has an immutable public receipt that their bet was placed. The smart contract that was used for that wager is self-executing and based on pre-set conditions, meaning that the payout on a winning bet is automatically paid out to the player. Whether the bet was placed on a casino game or a sportsbook, an on-chain wager provides the ultimate peace of mind to a bettor since an operator is unable to prevent a payout on claims that a game malfunctioned, the player cheated, or simply refuse to payout since the conditions are pre-set and the contract self-executes. Additionally, through the use of Provably Fair technology, a player is able to independently verify that the casino game they played was fair and that they were not playing against a stacked deck. Due to the irreversible nature of cryptocurrency transactions, operators do not need to worry about an upset bettor claiming that the transaction was fraudulent or trying to initiate a chargeback.

At Lion Gaming, we have developed a suite of on-chain wagering products for both online casinos and sportsbooks. Our Fer0x Engine offers white label casino software and features classic casino games such as baccarat and roulette, all of which are Provably Fair. For operators using our on-chain solutions, this feature can be toggled on or off by the bettor – meaning your customers do not have to utilize blockchain technology if they would prefer the more traditional iGaming experience.

If you want to know more about how your iGaming operation can benefit from blockchain technology, contact [email protected] today for a free consultation.

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Lion Gaming is an iGaming technology platform provider that offers bleeding-edge white label casino and sportsbook software engineered for the future. Our Fer0x Engine primes your operation for player acquisition, retention, and profitability.

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