As a currency Bitcoin has seen its critics and sceptics grow in the past months as its value continues to decline. Nevertheless Gaming Economics MD and SBC Contributor Lee Richardson tells the betting sector that the crypto-currency’s mechanisms may likely lead to much needed industry wide innovation and operational restructuring…
Many of us have heard of Bitcoins. Some have earnt these digitally-created tokens, spent them, perhaps traded or gambled with them. No doubt a few of us (some would say geeks) are also aware of the underlying expertise which creates and supports the crypto-currency, the so-called ‘blockchain’ technology.
Essentially, this is based on the computer-solving of cryptographic problems that enable data blocks to be added to the blockchain, a ledger that securely records every transaction and enables the exchange of digital assets, including Bitcoin. Last year, some tech industry analysts believed that this underpinning (and disruptive) technology evolved from relative-obscurity to more-mainstream. The evidence?
When you strip away some of the claims and counter-claims for crypto-currencies – of which Bitcoin is by far the best known – what is undeniable is that they have helped spawn a very clever form of new database technology, increasingly referred to as ‘distributed-ledger technology’ (DLT).
A product of the internet, huge progress in open-source protocols, cheap computing power and the science of cryptography, these are shared, replicated and decentralised transactional databases. And many observers are now paying serious attention to the benefits.
With no-one having centralised power or control, nobody can revise or tamper with the ledger’s history, or structure. Independent entities can thus rely on the same, shared and highly-secure source of information. Record-keeping costs are dramatically reduced, as duplication is avoided, reconciliation eliminated and error-rates reduced. This helps make settlements and transactions faster, with quicker settlement frequently meaning less risk in financial and trading systems. All these characteristics appeal to many business segments, including online betting and gaming.
The gaming industry has already done rather well in the past fifteen years from its widespread adoption and integration of database technology, profitably gleaning the ‘big-data’ it now manages, and always seeking further advances and additional applications.
Quite the polar-opposite of what DLT promises and, rather than a technology searching for a problem, it’s one which appears to have considerable scope to address urgent and common commercial imperatives. Payment alternatives and trading improvements are just two…there may well be more.
Some tech industry analysts believe we shall see, in 2016, the first applications of distributed-ledger technology within wholesale financial markets, based on private ‘permissioned’ blockchains. Other observers – including Gaming Economics – believe that some of the more agile online betting and gaming operators won’t be too far behind with their own creative applications of this promising new technology.
Lee Richardson – MD – Gaming Economics