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How to Build Blockchain Lottery: 10 Steps to Success

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Yuri Musienko
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Lottery is a favorite entertainment of many people, which has no analogues either in popularity or in terms of profitability among gambling. On average, every second person in developed countries regularly participates in lotteries. In some countries, for example in Spain, this figure is even higher and can reach 80% of the total adult population. However, despite this popularity, this industry has a number of serious flaws that worry every player:

  1. The problem of fair play. Neither state authorities nor independent auditors can guarantee the fairness of the draw, which repels millions of potential players from the lottery.
  2. The problem of collecting winnings. If you win the lottery, it can take up to 10 years to get the full amount of the prize. In this case, you will need to pay various fees and taxes, which can take up to 50% of the winnings.
  3. Limited access. In many countries there is a problem with the purchase of lottery tickets due to the lack of access to payment or banking systems.
Blockchain is currently the only technology that can solve all these problems by creating a transparent and fair platform for conducting online lotteries around the world. Next, we describe how to create such a blockchain platform.

Step 1: Development from scratch or franchise

Development from scratch. Starting a business from scratch or buying a franchise is a decision that depends solely on the entrepreneur and on what goals he sets for his company. In the first case, the development of a lottery platform will require a lot of time and effort and will cost much more. However, this approach will allow you to implement a unique solution, as well as allow you to retain full control over the development process and the product created, which is important if you intend to launch your franchise.

Franchise. Buying a ready solution, on the other hand, would be a good decision if you plan to start the lottery business quickly and for relatively little money, and you do not want to suffer from licensing. If you follow this path, make sure that the chosen franchise best suits the needs of your business. Call as many franchise providers as possible and conduct your research on their advantages and disadvantages.

White label lottery blockchain platform solutions provide:

  • Fire Lotto. The world's first international blockchain lottery with an honest and transparent system of collecting bets, RNGs and the distribution of winnings.
  • Samsara Protocol. Allows you to create lotteries with verifiable honesty and random play through the smart contracts of the Ethereum blockchain.
  • Quanta. Technology for quick, easy and complete integration of the blockchain system for the lottery in your platform.

Step 2: Lottery Concept Development

Lottery concept. Lottery is an organized game where three or more participants make fixed bets (buy tickets) in order to guess the result of a random selection of several numbers (characters / signs / images) and get a previously agreed prize for it. When creating a blockchain platform for the lottery, you need to determine the sizes of bets and winnings, and also decide how many numbers the participants will guess and from which pool random numbers will be selected for guessing. Common layouts: 4x20, 5x36 and 6x45.

Blockchain Lottery platform

Multiple lottery options on Fire Lotto blockchain platform

The type of required license usually depends on the choice of the size of bets and winnings, and the technical task for developing smart contracts depends on the scheme.

Game session design. The traditional lottery looks quite simple: the player gets a ticket, where you need to select / specify several numbers, after which random numbers are selected using one of the RNG options. Online lottery can be just as simple, but not necessary. From it you can make an exciting game with vivid animation, imaginary rivals, and even a plot in the way that online slots made from a simple one-armed bandit.

Blockchain Lottery RoBoom

RoBoom is one of the first online lotteries, implemented as a game with animation and storyline

UX / UI design. Having a concept and a general idea of the gameplay, you can begin to develop the design and maps of the lottery screens - how it will look like for an ordinary player. To do this, it is best to hire specialists who understand the usability and user needs. It will be more expensive, but the result will be much better.

Blockchain Lottery scheme

The scheme of the lottery on the blockchain for the user and operator in the Samsara Protocol
You need two UX / UI designs: for the web interface (site) and the mobile application. They should be similar, but not identical, because usability and the process of playing on these two platforms is different.

Step 3: Lottery License

Most lotteries require licensing in government. In the US, the type of license required and the process for obtaining it depends on the state. In other countries, such as the UK, are issued national licenses that allow lotteries throughout the state. British licenses allow you to run one of four types of lotteries:
  • National Lottery. The main lottery of the country, which has been held since 1994 and is regulated by the National Lottery Commission and a number of its own legislative acts. On average, it attracts more than 30 million pounds a week. Managed by Camelot Group.
  • Large public lotteries. Lottery draws, in which the sale of tickets brings more than 20 000 pounds per month or 250 000 pounds per year. You need a Gambling Commission license, which requires the gaming organizer to give 20% of the income for sports, cultural or charitable purposes.
  • Local Government Lotteries. Such games are conducted by commercial structures and managed by municipal authorities. Requires a Gambling Commission license. Part of the revenue goes to cover municipal expenses, charity, sporting events and the like.
  • Small public lotteries. Ticket sales should not exceed £ 20,000 per week or £ 250,000 per year. Require registration with local authorities. Most of the profits should go to charity or other good tasks.
If you create a small lottery among the workforce, a small sample of customers in a campaign, at school and charity events, then you do not need to get a license (in the UK).

Step 4: Lottery Website Development

Requirements. If you choose a franchise lottery, then creating a website does not take much time and does not require much effort, since the entire lottery background is usually on the side of the franchise provider, and you only connect to it, less often - you are given a ready-made background that you customize needs. By and large, you just have to develop a design and take care of safety.

Under the security of the lottery online platform is meant:

  • protection against interfering with the lottery;
  • protection of personal and financial data of users;
  • system development from hacking, phishing, DDoS attacks and more;
  • development/connection of the system of protection (encryption) of the connection between the service and the user's device.
When developing from scratch, all this needs to be done independently.

Design. One of the most important aspects of developing a platform for an online lottery, since the user's first impression depends on it and whether he agrees to play the lottery on your site. It is best to create a design with a focus on a specific target audience, because users have different and often conflicting tastes. For example, people 50 years and older prefer a simple and concise design, while millennials prefer bright colors and animation.

Step 5: Develop HD Wallet

A cryptocurrency wallet is needed to accept bitcoins, ether, EOS and other virtual money from players and pay winnings to winners. It is best to use HD-wallet (hierarchically deterministic wallet), since it allows anonymizing cryptocurrency transactions and protects against loss of access to a crypto account when a key file is lost, broken or stolen. Armory, Electrum, BitGo, TREZOR and other popular hierarchically determined wallets.

Benefits of HD Wallets:

  • Increased level of anonymity. HD-wallet allows you to hide the crypto addresses of users when depositing and withdrawing funds, even if this information is open in a particular blockchain, for example, in Bitcoin.
  • Seed-phrase is best remembered. Unlike the traditional method of storing all public and private keys, the secret phrase of 12 or more words is better remembered and gives access to all “child addresses” at once.
  • Easy backup. All your "child addresses" can be easily and quickly restored using just one master key - the seed phrase. The ability to restore is kept even after complete removal of the HD wallet distribution kit.

Step 6: Developing Lottery Smart Contracts

Smart contracts are the main thing that licensing authorities and players check, since the "purity" of the lottery depends on their transparency, quality and honesty. Ideally, you need to create a smart contract with an open source code for the lottery so that anyone can check it yourself and make sure your platform is fair.

There are several ways to do this:

  • By yourself. The best solution for those who are well versed in programming and blockchain technologies. It allows you to save money and time, because the contract code for a regular lottery is not very complicated. If you do not have programming skills, it is better to use another option, since any mistake in it threatens to lose its reputation, license and lawsuits. Moreover, if the court decides that the error in the smart contract is intentional, you can be imprisoned.
  • Ready solutions. On GeekHub and other similar resources there are many ready and at the same time free smart contracts for various lotteries, which are distributed as open source software. This option will save on the development of a smart contract, but not much, because the smart contract code needs to be integrated into your platform, which will require hiring an appropriate specialist.
  • Outsourcing. The best option if you need to develop a smart contract with unique or non-standard properties.

Step 7: Mobile Application Development

Blockchain Lottery interface
Blockchain Lottery mobile app interface
According to Flurry Analytics and comScore, most Internet users prefer to use mobile applications rather than websites. Including for participation in the lottery draws. Therefore, creating a lottery based on the blockchain, you must necessarily devote a significant portion of time and resources to developing your own mobile application with the following criteria:
  • The app should have a nice design and easy navigation. The user must immediately understand how to register, deposit money, place a bet, receive a prize and receive reference information.
  • The application should have a convenient lottery block: “Betting”, “Start”, “Payment Gateways”, “History”, “Favorites”, etc.
  • With the help of push-notifications, the player will receive messages about the results of draws, the ability to bet in selected games, promotions, updates, important news and more.
  • The application should have an “Information” section where you can read the lottery conditions, instructions on how to participate in the game, and the like.
As in the case of developing a smart contract or website, you can create a mobile application by yourself, using ready-made solutions or hiring a development company. Some white label solutions come bundled with a mobile application that is almost ready to launch. To start it, you need to adjust the design a bit, determine the lottery conditions, ticket prices and winnings.

Step 8: Testing the site, wallet, applications and smart contracts

Blockchain Lottery Hosho
The result of the audit of smart contracts lottery KIBO, made by experts Hosho
After the program code of all elements of the ecosystem is ready, all this needs to be thoroughly tested. At the same time, the most important elements - smart contracts and HD-wallet - need to be submitted for inspection by independent auditors. This is important both for you (it helps to detect critical errors) and for the players (it will show whether you can trust your platform or not).

As an example, you can take the Kibo blockchain lottery, whose team agreed with Hosho (the leader in security of the blockchain) about auditing their smart contracts. The result of the Kibo check turned out to be generally satisfactory, but there were some non-critical errors in the code. If Kibo hadn’t hired Hosho, then most likely these errors would have remained in the code, which could have caused crashes or hacker attacks.

Step 9: Develop Marketing Strategy

Advertising and promotion of the lottery on the Internet is pretty standard, except for some moments. As always, you allocate your target audience, see what resources it visits, what bloggers it reads and watches, and then use this information to promote your project.

The difference is that the lottery is a gamble, which means that:

  • Users need to be informed about the availability of the appropriate license and about where, when and by whom it was issued. In addition, you can not advertise the lottery in countries where lottery or gambling is prohibited, for example in Turkey, Saudi Arabia, Iran, Indonesia and several other.
  • Many online resources perceive cryptocurrencies and / or gambling as illegal and / or wrong, and therefore prohibit or restrict the advertising associated with them. For example, restrictions on advertising cryptocurrency and ICO introduced Google, Facebook and Instagram. Gambling is practically forbidden everywhere, unless it is a charity lottery.
  • Many people do not take the lottery as a game of chance, and therefore they are more willing to participate in it, especially if they donate part of their income to charity, eco-projects, children's treatment, and the like. The main thing is that lottery advertising is not directly associated with gambling.

Step 10: Starting the blockchain lottery

The launch of your blockchain lottery must be organized in such a way that thousands of people are waiting for this event. They do this with the help of a large-scale and rather expensive marketing campaign, which begins long before the launch of the site itself.

People are attracted by the following things:

  • Marketing influence. Advertising and promotion of a product or service in social networks with the help of accounts of famous personalities. It is best to use accounts with 3-20 thousand subscribers, as it is cheaper and gives a great conversion. Celebrity accounts are also important, but to increase brand awareness, rather than attract new players.
  • Promotions, bonuses, discounts and more. They make it possible to attract people due to obtaining subjective (imaginary) benefits. At the start of the project, promotions and bonuses should be especially large in order to attract as many people as possible.
  • Live broadcasts. A relatively new way to promote when, for example, streamers play the lottery during the broadcast of a game session. Usually this way sports betting is promoted.
  • Fundraising marathons. You can start a lottery at the start, the proceeds of which will go to some good thing: charity, building a school or a veterinary clinic, financing a research project, and the like.

How to Build Blockchain Lottery: 10 Steps to Success key takeaways:
  1. Step 1: Development from scratch or franchise
  2. Step 2: Lottery Concept Development
  3. Step 3: Lottery License
  4. Step 4: Lottery Website Development
  5. Step 5: Develop HD Wallet
  6. Step 6: Developing Lottery Smart Contracts
  7. Step 7: Mobile Application Development
  8. Step 8: Testing the site, wallet, applications and smart contracts
  9. Step 9: Develop Marketing Strategy
  10. Step 10: Starting the blockchain lottery
Merehead does professional development of build blockchain lottery. If you have questions, contact us for a free consultation.

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