Opinion: The big Bitcoin question

There is always heated debate in the egaming industry as to the business benefits of implementing Bitcoin or, indeed, other forms of cryptocurrencies to the operational platforms. However, most of the rhetoric never really addresses the ‘why’ question.

We need to ask the essential question why have digital currencies – and alternative payment solutions – become popular with today’s mobile digital consumers?

When we look back on this period of history, it will most likely be referred to as one of disruption and transformation of centralized 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 is a ‘peer-to-peer powered’ social economy, architecture and, in the case of digital assets, the Bitcoin (public) ledger. It has many benefits over the traditional set-up, which specifically includes data security; as the Blockchain (ledger) is open and transparent, there is nothing to hide or steal in the first place.

Users pseudo-anonymously control their private keys to this blockchain and data (bitcoins) are cyprographically transferred (thus updating ownership on the blockchain) Also, as there are no centralised servers (Banks), it means there is no central point for DDOS attacks which are commonplace in the iGaming sector.

Given such proven ‘disruptive’ examples as 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.

It is therefore understandable why cryptocurrencies such as bitcoin are becoming popular alternative payment methods – consumers simply distrust the current (centralized) institutions as they feel they are not in real control of their own money.

Innovation, change and disruption shall always rally public opinion both positively and negatively. But, as with most disruption in the digital and social economy, it is people power – it is the influence of consumers driving the change rather than the big corporations.

The rise of Generation Z

As consumers seek more efficient forms of finance and payment methods, it’s no surprise that the typical profile of Bitcoin users tend to be younger and typified as ‘Generation Z’. These consumers have grown up with digital technology, buying virtual goods and playing social games day and night; they are able to embrace change without reservations or preconceptions.

Given there has been over $433 million (£280m) of venture capital investment into Bitcoin ventures in the last two years alone, there are many venture capitalists who clearly share these attitudes.

It’s a cliché, perhaps, but they are truly the ‘now’ generation not just pushing change but real transformation and that means constantly challenging the status quo or legacy systems and the way things are currently done.

For example one amazing concept is the cryptographic nature of the Bitcoin protocol means it is possible to set up a “multi-signatory” Bitcoin wallet, where no single person controls the treasury account and these funds does not exist in a single geographic location.

Rule-based authentication can dictate that two of three, or three of five, co-signatories must approve and sign a transaction, from anywhere in the world, for the funds to move to where they are needed.

Cryptocurrencies have the potential to transform legacy gambling infrastructures and business models. There are hundreds of millions of potential consumers which are commonly referred to as ‘under banked’ and who do not have access to traditional banking, or payment methods such as credit cards.

But these same consumers are accessing the internet every day, with the same aspirations to buy goods and services. Bitcoin could be a means to service a 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 the tap of a button.