The iGaming industry is always in a state of flux, as technology disrupts systems and processes. The industry, therefore, needs to change its approach to crypto-currencies with the advent of the decentralized internet. Industry iGaming expert Tim Heath explains.
Tim Heath has over 10 years of management experience in online gaming and is the CEO of Coingaming.io the software provider for white-label Bitcoin casino solutions.
Today we are witnessing what is known as the third industrial revolution or one of disruption and transformation of existing centralized technology services. This ‘new internet’ is providing an open infrastructure that enables developers, collaborators and social evangelists to replace all of the applications and services that exist in our current ‘connected and centralized’ internet to that of a new decentralized internet.
This peer-to-peer powered and decentralized internet pervades our every-day lives, examples being Skype (peer-to-peer telephony), Bittorrent (peer-to-peer file sharing) and m-pesa (peer-to-peer SMS based financial transactions). It seems that every industry is gradually experiencing this transformational shift to a decentralized internet and applications driven by people. Aside from this shift, the other driver for cryptocurrencies such as Bitcoin is that consumers simply distrust the current (centralized) institutions as they feel they are not in real control of their own money.
If we look at Bitcoin, the decentralized internet has numerous advantages over the traditional set-up’s, which specifically includes data security; as the Bitcoin Blockchain (Ledger) is open and transparent, there is nothing to hide or steal in the first place. The ‘users’ pseudo-anonymously control their own private keys to the blockchain ledger and data (bitcoins) are cryptographically transferred (thus updating ownership on the blockchain ledger) Also, as there are no centralised servers (Banks), it means there is no central point for DDOS attacks that are commonplace in the iGaming sector.
As these consumers seek more efficient forms of finance and payment methods such as Bitcoin, it’s no surprise that the typical profiles of Bitcoin users tend to be younger often labelled ‘Generation Z’ born after the Millennial Generation and a highly sought after market for iGaming brands.
In terms of the business advantages for iGaming operators, perhaps the most amazing concept is not simply the ability to accept deposits of €0.01 or €1,000,000 instantly, without fees. Rather, given the cryptographic nature of the Bitcoin protocol, it is the aspect to create a “multi-signatory” Bitcoin wallet. This Bitcoin wallet means that no single person controls the treasury account as these funds do not exist in a single geographic location. With the addition of rule-based authentication, you can dictate that 2 of 3, or 3 of 5, co-signatories must approve and sign a transaction, from anywhere in the world, for the funds to move to where they are needed.
Cryptocurrencies also have the potential to transform legacy gambling infrastructures and business models. After all there are hundreds of millions of potential consumers that are commonly referred to as ’under-banked’ and who do not have access to traditional banking or payment methods such as credit cards. Yet these same consumers are accessing the Internet every day, with the same aspirations to buy goods and services. Bitcoin therefore could be a means to service this growing consumer market which wants to do the same things as previous generations, just more securely, more quickly and most probably whilst on a mobile with a swipe and tap of a button.
Tim Heath CEO – Coingaming.io