I’m often asked by many in the i-gaming industry what the benefits are of introducing bitcoin or indeed other cryptocurrencies.
Firstly, before we delve into that answer, we need to ask the question of why is it that digital currencies and alternative payment solutions are becoming popular in the first instance.
This period of history can be defined as one of disruption and transformation or of the rise of the new internet. This new nirvana is providing the infrastructure of tomorrow. which enables developers to build all the applications and services that exist in the current connected and centralised internet to that of a new decentralised internet.
This new version of the internet removes the requirements for physical servers or data centres. They are replaced by the users’ own computers. Running through this new “people powered” architecture, has some benefits, which include data security as the information is only ever stored or in transit and of which only the users have access to the passwords to decrypt that data. Also if we have no servers, it means no central point for DDoS attacks, which are common place in the i-gaming sector. It has also given rise to cryptocurrencies such as bitcoin.
Aside from the fundamental shift of a decentralised internet driven by people, we have also endured the financial meltdown, with the banking industry and financial sectors receiving untold amounts of negative publicity over how they treat customers with misselling scandals, hidden charges, costs, fat-cat bonuses and so on.
So it’s understandable why cryptocurrencies such as bitcoin are becoming popular alternative payment methods – consumers distrust the status quo. Innovation, change and disruption shall always galvanise and polarise opinion both positively and negatively. But as with most disruption in the digital economy, it is consumers driving the change - not so much the big corporations.
So who’s using bitcoin? Well, users tend to be younger and typified as “generation Z”, and therefore a very much sought-after demographic segment. They have grown up with digital technology, buying virtual goods and playing social games. They are able to embrace change very swiftly without any hang-ups or preconceptions. It’s a cliché, but they are the now generation not just pushing change but also transformation - and that means constantly challenging the status quo or legacy systems including the way things are done.
Bitcoin has the potential to help modernise existing gambling infrastructures and business models. There are hundreds of millions of potential consumers out there that are commonly referred to as “under banked” and may not have access to traditional banks, ATMs or debit cards. But yet that same demographic group is accessing the internet daily and wishing to buy goods and services – so it’s a numbers game and bitcoin could be a means to service a relatively large and growing consumer market who wants to do things differently from the previous generation.
We are already seeing ecommerce and digital behemoths such as PayPal accepting bitcoin; Dell is selling computers for bitcoin, Virgin Galactic is selling space voyages for bitcoin and Microsoft has joined the party. It is clear that more and more companies are adopting bitcoin as a payment solution as they understand the benefits and continued usage by consumers.
In terms of i-gaming, a number of poker, casino and sportsbook providers that have adopted bitcoin are growing and we are providing these operators with the necessary tools to run their bitcoin gaming business.
Our industry needs innovation and differentiation, in order to thrive and stay ahead of your competitors. It is quite clear that cryptocurrencies such as bitcoin and the decentralised internet are here to stay, so I envisage more gaming companies will follow suit and will integrate bitcoin this year.
Tim Heath has more than 10 years management experience in online gaming and is the CFO of Coingaming.io, a leading platform provider specialising in the provisioning of bitcoin cryptocurrency solutions for the i-gaming sector.
