Following on for last year’s first ever Bitcoin4igaming Conference held in London at the end of November. Digital currencies such as Bitcoin are tipped to have a seminal year in igaming, with many operators , affiliates and jurisdictions looking to these ’lines of computer code’ to service a growing demand from players wishing to spend and play with Bitcoins.
SBC Business Correspondent Mark McGuinness talked to Tauri Tiitsaar, the COO of Coingaming.io a leading platform provider which specializes in the provisioning of Bitcoin crypto currency solutions for the iGaming sector.
SBC: For our readers that haven’t perhaps heard of Bitcoin, can you tell us about this alternative payment solution?
Tauri: Bitcoin is the most popular of what are commonly referred to as cryptocurrencies or internet based money. It can be described or thought of as any other foreign currency. For example if you go abroad on business or family holiday, you need to know how much things cost at your destination in their local currency, how to pay, where to pay and so forth. With Bitcoin it is very similar, but it is a global payment method. First you exchange your everyday currency often referred to as ’Fiat currency’ to Bitcoin, you get an online wallet where you store your Bitcoins and you start making payments. You can even get a debit card to make payments in stores and several large retailing companies such as Microsoft and Amazon are already accepting Bitcoin as a payment method.
SBC: How large is the Bitcoin market?
Tauri: Compared to one year ago – it is very big! This currency has more users than some country specific currencies and therefore presents a huge opportunity for igaming brands to reach a large group of new players. Each and every person or a company using Bitcoin is directly contributing to increasing awareness by telling their friends or by announcing it through social networks and other forms of digital communication. The usage is increasing every day as people become aware of the benefits over “fiat based paper money“. Of course it may not be as big as Euros or Dollars yet but who knows, maybe one day it will happen! I am quite sure that if you ask people on the high street they will have heard of Bitcoin and with the continued distrust and disdain that consumers have towards traditional financial institutions can only contribute to further demand – after all Bitcoin is a people powered currency and payment method.
SBC: What are the benefits of using Bitcoins?
Tauri: Over the years’ the banking industry and financial sectors have been receiving a lot of negative publicity over how they treat customers with miss-selling scandals, hidden charges, costs and so on.
Therefore two of the most significant benefits of using Bitcoin by far are that there are either very low fees or no fees involved with the transactions between customer and the merchant. Another major benefit is they are fast. For example when you pay a cheque from another bank into your bank, your bank shall often hold that money for several days, because it can’t trust that the funds are really available to credit your bank account with. Likewise bank or wire transfers can be another process which always takes longer than anticipated for the funds to clear. Bitcoin transactions are far faster and can be instantaneous which means users have access to funds quicker and can use those funds for whatever they wish.
SBC: Is Bitcoin trustworthy given the backlash against the traditional banking sector?
Tauri: Bitcoin is as trustworthy as any other currency once you know a little more about it. It can be more volatile than say the paper based Dollar or Euro, but it also offers much more flexibility. Whoever uses it should apply the same security as they would with fiat paper based currency or payment instrument. You do not share your bank account logins, debit card PIN code or cash with others. With Bitcoin you simply apply the same logic – you have an online wallet, you should keep the logins to it safe. If you are using a debit card then keep the PIN code safe as well. At the end of the day it comes down to the individual user to exercise the requisite care themselves. Bitcoin is here to stay and it is as safe as you keep it like any other financial instrument.
SBC: Has there been much interest from the online gambling industry for Bitcoin?
Tauri: Growth was perhaps slower a few years back, but since Bitcoin has grown in popularity more and more people from the online gambling sector are starting to see the growth potential. Gambling businesses are of course very much driven by numbers and return on investment, so the early adopters of Bitcoin enabled gambling products are showing strong growth numbers which makes others wish to jump on-board the bandwagon.
Given the lower transaction fees associated with using Bitcoin both from a player’s perspective moving money into and out of the operators’ gaming platform and for the operators over other more traditional payment methods, provides a strong business case and justification for more gaming operators and platforms to enable Bitcoin acceptance.
SBC: Does Bitcoin therefore have the potential to transform legacy gambling infrastructures?
Tauri: Innovation and change always polarises opinion both positively and negatively. With most disruption in the digital economy, it is consumers driving the change not so much the corporates. With that Bitcoin users tend to be a younger and therefore much sought after demographic segment that has 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 for sure but they are the now generation not just pushing change but transformation and that means constantly challenging the status quo or legacy systems of the way things are done. Just in the same way as mobile has increased the reach and accessibility of gaming to a wider audience, it could be fair to say it was the consumers demanding the change as against the operators foreseeing the demand. Bitcoin can certainly help modernise existing gambling infrastructures and business models. There are hundreds of millions of potential consumers that are regarded as ’under banked’ and may not have access to traditional banks, ATM’s or debit cards. But yet that same group are accessing the internet and wish to buy goods and services – so it’s a numbers game and Bitcoin could by a means to service a relatively large and growing consumer market who wants to do things differently from the previous generation.
SBC: How sustainable is Bitcoin?
Tauri: Bitcoin was made to stay, the currency at the moment is volatile, just like many traditional fiat based currencies, but the more users it has, the less volatile it is. It is already been added by PayPal; Dell is selling computers for Bitcoin, Virgin Galactic is selling space voyages for Bitcoin and Air Baltic is selling flight tickets for Bitcoin. It is clearly visible that more and more companies are adopting Bitcoin as a payment solution as they understand the benefits and continued usage by consumers. In 10 years it could play a very big part in the world economy.
In terms of igaming, a number of poker, casino and sportsbook providers have adopted Bitcoin and we are providing operators with the necessary tools to run their Bitcoin gaming business. I suppose the developments we expect and require are the same as operating any online business; you investigate trends and how to differentiate your business models. It is quite clear that crypto-currencies such as Bitcoin are here to stay, as a lot of the gaming companies have integrated Bitcoin and more will follow suit throughout this year.
Tauri Tiitsaar COO Coingaming.io