The success of Bitcoin and related cryptocurrencies has undoubtedly been one of the biggest talking points in the financial sector for a great number of years. It is less than a decade since the digital form of currency known as Bitcoin was first launched, yet it has taken huge strides from being a minor proposition to becoming a major player in the modern money world.
You only have to go back to the middle of December to see when Bitcoin arguably made its most notable step towards the big time, reaching a record high of $19,783and capping off what had been a stellar 12 months. In January 2017, a single Bitcoin was worth less than $1,000, so the huge growth across the following months led to big headlines and in turn took the currency to the verge of breaking into the mainstream.
However, despite the strong performance of the cryptocurrency in the last year or so, Bitcoin remains a source of intrigue and there are still plenty of doubts regarding both its long-term viability and whether it truly has a future as an accepted form of currency.
Among the latest voices to speak out on this issue was Joni Teves, a strategist for global investment bank UBS. CNBC reports that in a note to clientsshe argued that Bitcoin remained “too unstable and limited” to be a genuine means of payment, even going so far as to say that the currency “falls short of criteria that need to be satisfied to be considered money”.
To be fair, the volatility of Bitcoin is a common issue raised by critics of the cryptocurrency and it is safe to say it has not maintained the huge values it reached at the end of last year. However, there do still remain plenty of positive signs that the concept will continue to become more attractive to investors and the general public across the coming months and years.
Ready for the big time
Researchers at Imperial College London recently released the paper Cryptocurrencies: Overcoming Barriers to Trust and Adoption, which outlined that Bitcoin and digital currencies, in general, were taking major steps towards being embraced by the mainstream.
In comments which coincidentally echoed those made by UBS’s Joni Teves, Professor William Knottenbelt stated that Bitcoin and related concepts had made “significant headway towards fulfilling the criteria” required to become an accepted payment method.
According to the researchers, cryptocurrencies now currently face six challenges in order to really be embraced as part of the mainstream, with these including scalability, privacy and the need for a standardised global approach to regulation. Dr Zeynep Gurguc from Imperial added that if the issues are ultimately addressed, cryptocurrencies could be “the next natural step” in the evolution of money as we know it.
A safe bet?
So while hopes are high that Bitcoin and similar currencies are edging towards the mainstream, where can the general public be expected to make use of them?
In recent years a host of different types of businesses have dabbled in offering Bitcoin as a genuine payment option, with computing giant Microsoft embracing it in its online store and the travel website Expedia also for a time allowing people to make hotel bookings with it. There was even a point when people were using them to buy Subway sandwiches.
However, one specific industry which is thought to have a major eye on embracing cryptocurrency is the gambling world, with new research suggesting that Bitcoin could have a big impact on the area in the future. The Global Online Gambling Market 2018-2022 report has outlined that Bitcoin gambling has become a key trendfor the industry in recent times, with many gambling organisations beginning to adopt the cryptocurrency as a means of making a deposit.
A good fit
The suggestion that Bitcoin and cryptocurrencies are likely to be increasingly used in the casino world certainly does make some sense. For the uninitiated, the online gambling market has developed significantly across the past couple of decades to become a massive industry. The size of the market back in 2015 was estimated to be $37.91 billion, yet it is suggested that this will rise to an impressive $59.79 billion by 2020. In Britain alone, the Gambling Commission estimated in 2016 that online gambling was the largest gambling sector and generated a gross yield of £4.5 billion, with £2.6 billion of that coming from casino games and £1.8 billion from online slots.
Considering these figures, this hugely lucrative industry has unsurprisingly become very competitive in recent years. Casino sites tend to do all they can to get people signed up and using their services, with Oddschecker highlighting the range of bonuses and offersthat tend to be used to entice new members. With this in mind, it is understandable that casino sites would want to offer their players a range of options for payment – whether it is something involving traditional banks or a more modern method such as PayPal or even Bitcoin.
Furthermore, online casino sites also tend to be early adopters of emerging trends in general, with another example being their use of video streaming to offer ‘live casino’ games hosted by real-life dealers. Again, with this in mind, it is perhaps not a great shock to see the industry seriously examining the potential of Bitcoin ahead of a number of other businesses.
While Bitcoin may not yet have been embraced by the mainstream, the casino industry’s interest in the concept certainly means it is putting itself in a strong position if the cryptocurrency does eventually have staying power with the general public.
According to research released earlier this year by Finder.com, just eight per cent of people in the US currently own cryptocurrency and while that may seem relatively low it still equates to 26 million people. In addition, another 7.36 per cent – or 24 million – added that while they do not currently own it they plan to in the near future.
Such figures highlight how – despite the ongoing volatility seen in the cryptocurrency market – the wider public are beginning to latch on to the concept. Furthermore, it is not a stretch to consider that these trends in the US could well be reflected in many countries across the globe. Indeed, a study released earlier this year by the Dutch banking organisation INGfound that while less than one in 10 Europeans are thought to own cryptocurrency at the present time, 16 per cent expected to take a greater interest in them in the future. A further report by Dalia Research added that Japan had the highest level of cryptocurrency ownership in the world, with 11 per cent of its population owning such currencies.
If Bitcoin and other cryptocurrencies edge towards becoming a stable payment as some have predicted, the chances are that the number of people drawn to taking an interest in the concepts will likely increase. This, in turn, may also spell good news for early adopters of such currencies – like the casino industry – who could well be in prime position to benefit in the long term.
In less than ten years cryptocurrencies have grown from a small-scale digital idea to one of the most talked-about issues in the financial world today. While it is hard to predict the future regarding Bitcoin, it is safe to say that the casino world is one area where it is likely to be seen for many a year to come. Only time will tell of course whether the industry’s adoption and interest in cryptocurrency turns out to be a gamble worth making. It is sure to be an exciting few months and years ahead.