Guest Blog: How Bitcoin and Blockchain are changing business

Guest Blog: How Bitcoin and Blockchain are changing business

Tuesday, May 26, 2015
Tim Heath explains why the industry needs to alter its approach

Bitcoin and blockchain technology have heralded a new economy. However, iGaming expert and CEO of Coingaming.io Tim Heath explains to TotallyGaming.com why the industry needs to adapt its approach to bitcoin with the continued rise of the decentralised internet.

 

The financial world is now wakening up to Bitcoin and its impact on the banking supply chain, writes Tim Heath. Indeed as testament to this fact, last year the Bank of England published in a report concerning the blockchain which is the underlying technology of Bitcoin  as a "significant innovation" that has "far-reaching implications".

And there’s more. Oliver Bussmann, group chief information officer of Swiss bank UBS was quoted as saying: "I believe and this is my personal view that blockchain technology will not only change the way we do payments but it will change the whole trading and settlement topic."

We are on the brink of a new digital era or the third industrial revolution. A new truly peer-to-peer internet has dawned which provides all the applications and services that transitions our current thinking of connected and centralised internet to a decentralised or virtual internet.

The evidence is all around us. It shapes our digital and mobile lives from Skype (peer-to-peer telephony), Bittorrent (peer-to-peer file sharing) and m-pesa (peer-to-peer SMS based financial transactions). Every industry is experiencing this shift to a decentralised internet and applications driven by people.

If we examine Bitcoin, this decentralised, internet-based payment protocol has numerous advantages over the traditional set-ups that are controlled by banks, notaries and insurance companies. Specifically the Bitcoin Blockchain (Ledger) is open and transparent, there is nothing to hide or steal. The ‘users’ pseudo-anonymously control their own private keys, (previously the banking system) to the blockchain ledger and data (bitcoins) are cryptographically transferred (thus updating ownership on the blockchain ledger).

Driving the change is the consumers; they simply loathe and distrust the establishment (centralised) institutions as quite rightly post the financial meltdown, they feel they are not in real control of their own hard-earned money.

For iGaming, the opportunities abound. Perhaps the most significant notion is not simply the ability to have deposits of €0.01 or €1,000,000 instantaneously, with zero or low fees. It’s the fundamentals concerning the blockchain technology and the cryptographic nature to create a “multi-signatory” Bitcoin wallet. This Bitcoin wallet simply means that no single entity or person controls the treasury account, as these funds do not exist in a single geographic location or bank account. Furthermore deploying rule-based authentication protocols, the operator can dictate that two of three, or three of five co-signatories must approve and sign a bitcoin transaction, from anywhere in the world, for the funds to move to where they are requested.

However the real panacea could be that bitcoin and the blockchain technology has the ability to transform the banking industry by simplifying processes. After all there are hundreds of millions of potential customers globally that are labelled as ’under-banked’ and who do not have access to traditional banking or payment methods such as credit cards.

Therefore bitcoin could be a payment protocol to service this growing consumer market and if an iGaming operator’s platform supports bitcoin, it could mean targeting a segment that has the same aspirations as perhaps more affluent strata’s of society interested in gambling entertainment services.

About the author:

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.

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