Understanding Ethereum with Ryan from Virtue Poker

Barry Carter chats with Ryan Gittleson of Virtue Poker, a poker room which uses Ethereum to revolutionise RNGs and money handling.

Following on from his attempts to learn about cryptocurrency and how it impacts poker, Barry Carter chats with Ryan Gittleson of Virtue Poker, an upcoming poker room set to launch real money games using Ethereum next year (and who recently announced Daniel Colman and Brian Rast as ambassadors).

Why does Virtue Poker use Ethereum instead of Bitcoin?

Ryan Gittleson: A standard commercial bank is a centralised ledger of who owns what and how much. If one person moves money from A to B, the bank essentially just updates the ledger. There is a trust element in this; we trust they are doing this honestly and that they wont be hacked. There is a single point of failure, like if the power goes down at the bank. With Bitcoin it is completely decentralised, there are thousands of computers all over the world that have an identical copy of the ledger. When I move money, all these computers are competing to solve a cryptographic puzzle, when the first does it the rest will confirm they got it right, and they all update the ledger simultaneously.

Ethereum takes this concept but also now you can include computer code in these transactions called a smart contract. So with Virtue Poker instead of sending money to the poker room, the players send it to a smart contract that has the code for the parameters of the game, the payouts, the bet sizes and a chip counter. The smart contract acts as a short-term escrow account, which holds the player funds while the game is being played. This is owned by the Ethereum blockchain, it is not owned by any person or us. We never touch your money, the only money you risk is the amount you send to the table contract, at the end of the game that money is sent back to your wallet in 30 seconds or less, automatically, without any interference by us.

"Our goal is to remove risk and improve fairness"

Virtue Poker ambassador Brian Rast
Virtue Poker ambassador Brian Rast

How does the Mental Poker method of shuffling work?

Ryan Gittleson: The basic algorithm is as follows: Three players, Bob, Alice and Ted are seated at a table and are playing a game of Texas Hold’em. Bob is the dealer, and he generates a deck of 52 cards on his machine, only he can view the cards. Using Fisher-Yates /dev/urandom he shuffles the deck of cards, and then encrypts the deck with the same encryption key on each card, making the deck unreadable to anyone but himself. He then passes the now encrypted deck to Alice, who does the same thing: shuffles the deck of cards and then encrypts them. Finally, Alice passes the deck to Ted who goes through the same process.

The deck is now in its final ordered state, 1 through 52, and this order does not change throughout the course of the hand. Ted passes the now 3x encrypted deck of cards back to Bob, who takes off his “shuffle lock” and now encrypts each individual card with a different encryption key: B1, B2….B52. He passes the deck to Alice, who does the same thing: removes her “shuffle-key” and encrypts the deck with a unique encryption key A1, A2….A52. Alice then passes the deck back to Ted, who completes this same process.

Bob is assigned the first and second card in the deck, but he only possesses his encryption keys that correspond to these cards. Alice and Ted therefore share their encryption keys that correspond to the first two cards, A1 and A2, and T1 and T2 respectively, so that Bob holds all three decryption keys for his private cards. This enables Bob to view his private cards but no one else. This process is repeated for each player at the table, so each player can only view their own private cards.

All players call and the hand goes to the flop. The flop is denoted by cards 7, 8 and 9 in the deck. All players must share their encryption keys that correspond to the community cards, so that everyone can see these shared cards. This process continues until the end of the hand, where the winning player is awarded the pot, and all players reach consensus by signing the end result of the hand which is sent to the Ethereum blockchain to update the game state (chip totals) for all players seated at the table.

Can you explain your 'Justice' system of dispute resolution?

Ryan Gittleson: At the end of each hand all the players have to agree about who won. If a dispute arises, which only could occur if an individual hacked the application, the Justice can in real-time see that a player was misreporting the hand result, and resolve the pot to the winner player. It’s important to note, this happens in the background, the look and feel of Virtue Poker is similar to other poker sites. The Justice system also handles the dropped player problem, which happens if a player disconnects and cant show their encrypted hole cards before a hand is complete. The Justice also sits in the background logging all the game data so we have a record of hand histories sorted by player and can use this to detect cheating.

Our goal is to remove player deposit risk and improve game play fairness. I think most people trust PokerStars but because it there is a third-party with a RNG located in some off-shore country shuffling the cards there is always this lingering perception of doubt as to whether it is fair, it’s a natural emotional reaction. With Virtue Poker, each player has a RNG built in their machine, and all players are involved in card shuffling. As long as one player shuffles the deck correctly, the game is fair.

"This could change staking"

Virtue Poker ambassador Daniel Colman
Virtue Poker ambassador Daniel Colman

Most people trust RNGs these days, are you solving a problem that doesn’t need fixing?

Ryan Gittleson: I did a lot of market research over the last few years to see what our ultimate selling proposition was. The most important thing to players was first quality of games but the overarching theme of not having to trust and operator with your money and shuffling the cards. The core value proposition of the smart contract means we can’t touch your money. There is a long pathway to gaining people’s trust, we are a new startup, so how can we gain people’s trust? This solution not only addresses concerns people have previously had, it allows us to gain a lot of trust and build our brand quickly.

In your White Paper you mentioned there is the potential for third parties to develop apps based off the software, what could that look like?

Ryan Gittleson: I don’t think we could do it ourselves, but there are such things as side bets and prediction markets around the table itself. So we could get Daniel and Brian playing on Twitch with markets being created by people watching making side bets on the game. You could have an interactive experience for people watching. I was watching PokerGo last night and it would be absolutely killer if you could make side bets on that.

It also seems like smart contracts could improve the staking world, given that the majority of problems caused by staking is either from contract confusion or people just not paying up after winning money.

Ryan Gittleson: You could automate a staking smart contract where you say you will take 80% of the payout, hook that into the table contract on Virtue Poker, so that there is no way to go outside of exactly what was planned. On 2+2 it is one of the most popular things people talk about. We’d need legal feedback if we were to do it, but Ethereum is completely open source, it is probably less than 200 lines of code to do that.

The price of Cryptocurrency is so volatile do you think it would need to stablilise for Virtue Poker to work?

Ryan Gittleson: The Justice system and this particular issue are the two biggest technical issues for us. We intend to integrate these other products called Stable Coins which are essentially an options contract where you lock in the value at the buy-in stage of the tournament. The other question is what will the table stakes look like, will it be 1c/2c? Is it going to be in Ether or VPP? How do people even know the stakes people buy in to? We’ve built the back-end software, now our focus is shifting towards user experience to address these difficult problems.

To find out more visit Virtue Poker's website or read their White Paper

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Comments (6)

newest first
  • tmannie

    #1

    I think it is the way to go , it is human nature to distrust the dealing whenever one gets beaten by an impossible river card, and on some sites this seems to happen more often than on others. Anything that can give the players more confidence in the fairness of a game is a good thing
  • BarryCarter

    #2

    I mostly agree, though I suspect that human nature will just evolve and distrust the blockchain too :)
  • Coinseeker12321

    #3

    sounds awesome!
  • KrisRukov

    #4

    @tmannie, do you have any empirical data to support the statement that some websites run/operate differently than others ? If not, then this is just a meaningless statement with no real proof. I think that pink unicorns are shuffling the cards before they appear on PokerStars software.
  • KrisRukov

    #5

    btw on the topic of "trust" i have yet to see a grinder who lives off poker for years and claims that anything is rigged. Ask any losing player tho and they all will tell you the big scheme how everything is set up and how they run good in site A and bad in site B ( that actually may be true for them due to small sample size ) or any gambler will tell you how the roulette is rigged. Anyways, what do i know
  • w34z3l

    #6

    I think given that many sites invest a lot in trying to make their RNG "as random as possible", it's safe to say that some RNGs are more "random" than others.

    Presumably the randomness level of the vast majority of RNGs is high enough that an unassisted human brain would never be able to pinpoint anomalies.

    Anyway, anything with poker and cryptos in the same sentence is probably a win-win. They could easily screw up the software though, time will tell.