SECURE FUNDING AND PAYOUT OF CRYPTOGRAPHIC CURRENCY FROM FIAT CURRENCY PURCHASES
Systems and methods for enabling the secure use of cryptocurrencies (such as but not limited to Bitcoin, Ethereum, or Litecoin) in prize funds or gift cards that accept purchases or wagers in fiat currencies and payout in cryptocurrency. The prize funds can be associated with lotteries, charitable gaming, or casino environments with the inherent volatility of cryptocurrencies optionally mitigated and cryptocurrency payouts enabled for consumers or players without prior digital wallets as well as consumers or players with preexisting digital wallets.
1 . A method of operating a lottery system that accepts a wager in fiat currency and pays a prize in cryptocurrency, the method comprising:
receiving, at a lottery central site server, via a network from a remote player computing device, an indication of a fiat currency wager made for a play of a lottery game;
generating, by the lottery central site server, a digital lottery ticket for the play of the lottery game, the digital lottery ticket associated with the fiat currency wager, the digital lottery ticket associated with either a predetermined prize structure or a future drawing;
determining, by the lottery central site server, that the digital lottery ticket is a winning digital lottery ticket;
procuring, from a cryptocurrency source, an amount of cryptocurrency sufficient to fund a portion of a prize associated with the winning digital lottery ticket;
storing the procured cryptocurrency in a funding wallet, wherein transactions associated with the funding wallet are recorded on a blockchain ledger;
transmitting, to the remote player computing device, a redemption code that comprises a public cryptocurrency address and a corresponding private cryptocurrency key; and
enabling the remote player computing device to activate a digital wallet using the public cryptocurrency address and the private cryptocurrency key, and enabling the prize to be transferred directly to the digital wallet.
2 . The method of claim 1 , wherein the remote player computing device comprises one of a smartphone, a tablet computer, and a web browser executing on a personal computer.
3 . The method of claim 1 , which comprises immediately determining, by the lottery central site server, whether the digital lottery ticket is an instant lottery ticket and the win/lose status after receiving the indication of the fiat currency wager.
4 . The method of claim 1 , wherein the digital lottery ticket is a draw game lottery ticket, and the determination of whether the draw game lottery ticket is a winning draw game lottery ticket occurs after the future drawing.
5 . The method of claim 4 , wherein the redemption code is valid after a predetermined time window after the future drawing.
6 . The method of claim 1 , wherein the remote player computing device includes a player application that causes the remote player computing device to display both the digital lottery ticket and a digital wallet activation interface.
7 . The method of claim 1 , wherein procuring cryptocurrency includes Bitcoin, Ethereum, Litecoin, or any combination thereof.
8 . The method of claim 1 , which comprises harvesting volatility from the cryptocurrency source by procuring cryptocurrency at a time when its fiat equivalent value exceeds an edge/odds threshold and storing excess value in the funding wallet.
9 . The method of claim 8 , which comprises rebalancing the procured cryptocurrency with fiat currency periodically using a Shannon’s Demon formula.
10 . A lottery system configured to accept a fiat currency wager and pay a prize in cryptocurrency, the lottery system comprising:
a lottery central site server operable to communicate with a remote player computing device of a player via a network;
a wager process module executable by the lottery central site server to receive an indication of the fiat currency wager via the network and generate an associated digital lottery entry;
a win/lose determination process module executable by the lottery central site server to identify the digital lottery entry as a winning entry in accordance with lottery game rules;
a cryptocurrency source process module executable by the lottery central site server to procure cryptocurrency using funds based on the fiat currency wager;
a funding wallet process module executable by the lottery central site server to receive the procured cryptocurrency and record transactions related to a funding wallet on a blockchain ledger; and
a redemption process module executable by the lottery central site server to determine the digital lottery ticket is a winning ticket, transmit a redemption code to the remote player computing device, and enable direct activation and funding of a digital wallet on the remote player computing device.
11 . The lottery system of claim 10 , wherein the transmission of the redemption code comprises the transmission of the cryptocurrency prize to the remote player computing device via a public key associated with an existing digital wallet owned by the player.
12 . The lottery system of claim 10 , which comprises a harvesting volatility process module executable by the lottery central site server to harvest volatility from the cryptocurrency source by procuring cryptocurrency at times when its fiat equivalent value exceeds an edge/odds threshold and storing excess value in the funding wallet.
13 . The lottery system of claim 10 , wherein the redemption process module is executable by the lottery central site server to transmit public and private keys as separate data elements to the remote player computing device.
14 . The lottery system of claim 10 , wherein the remote player computing device comprises a player application interface that enables the remote player computing device to display both the digital lottery entry and a digital wallet activation screen.
15 . The system of claim 10 , wherein the cryptocurrency includes Bitcoin, Ethereum, Litecoin, or any combination thereof.
16 . A computing platform in network communication with a remote player computing device, which:
receives over the network a wager submitted in fiat currency from the remote player computing device of a player;
generates a digital lottery entry linked to the wager;
determines that the digital lottery entry is a winning digital lottery entry according to game rules;
procures cryptocurrency using at least a portion of the received fiat funds;
maintains the procured cryptocurrency in a funding wallet whose transactions are recorded on a blockchain ledger; and
transmits a redemption code to the remote player computing device, thereby enabling the player to receive a cryptocurrency prize for the winning digital lottery entry directly into a player-controlled digital wallet.
17 . The computing platform of claim 16 , wherein the transmission of the redemption code comprises a transmission of a public key associated with an existing digital wallet.
18 . The computing platform of claim 16 , wherein the transmission of the redemption code comprises a transmission of a public key associated with an existing digital wallet owned by the player.
19 . The computing platform of claim 16 , wherein the transmission of the redemption code comprises a transmission of public and private keys as separate data elements to the remote player computing device.
20 . The computing platform of claim 16 , wherein the cryptocurrency includes Bitcoin, Ethereum, Litecoin, or any combination thereof.