Industry Innovations Driving Bitcoin Growth

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Wednesday, June 7th, 2017 | Written by Stephen Smith

Volatile markets may be causing Bitcoin valuations to dramatically shift in the blink of an eye, but still more and more industries are continuing to warm to the idea of accepting the cryptocurrency as a means of payment, suggesting that Bitcoin won’t be fading away anytime soon. In the meantime, the online gambling industry is at the heart of the Bitcoin usage boon, and is currently driving the adoption of the virtual currency worldwide.

Fluctuating Value

In 2017, Bitcoin values have fluctuated dramatically, based mostly on financial news making the headline on any particular day. In March 2017, for instance, Bitcoin’s market value had dropped by $2 billion due to concerns about how transactions were being processed online. By April 2017, however, values had rebounded by $1 billion on the heel of news that Japan had adopted a regulation to make Bitcoin a legal form of currency acceptable by merchants.

Although the amount that a single Bitcoin costs may be radically different from day to day, an ever-increasing number of people have continued to use the cryptocurrency. Against this backdrop, online gambling sites are coming under pressure from players to accept Bitcoin, and as a result many operators have already recognized the upside of the virtual currency and have begun to accept it at their sites.

Security Concerns

In the world of iGaming, security is always a concern, with online casinos and sports books investing millions in developing firewalls and encryption that prevents players’ funds from being illegally accessed. However, many online operators are now looking at Bitcoin as a solution to the problem because as a completely anonymous form of currency, Bitcoin makes it impossible for players to be individually targeted by cyber thieves, thus making transactions safer. Bitcoin’s anonymity is also appealing to players that prefer to keep their online gambling a private matter.

Banks Adapting to Innovation

As online gambling sites and other businesses have begun to accept Bitcoin, banks are beginning to experiment with ways to process transactions in the currency. UBS Bank and Barclays, for instance, have both launched pilot programs related to Bitcoin processing. For financial institutions, Bitcoin also offers a major advantage–speed. Traditional electronic transactions can take several days to process, leaving merchants unable to collect funds immediately. Bitcoin-based transactions can be processed within 10 minutes, benefiting both financial institutions and those originating the transactions. For online gamblers, this further means that funds withdrawn from iGaming player accounts can be accessed far more quickly through the use of Bitcoin.

Right now, the biggest barrier to Bitcoin’s success is how the transactions are put through. There are some concerns that the blockchain used to generate Bitcoin is flawed, and this has pulled down the value of the currency some and slowed its adoption in some parts of the world. As developers come up with new ways to enhance the blockchain and more consumers demand that merchants accept the safe, discreet currency, we’re sure to see a greater expansion in the market and a continued rise in Bitcoin’s value.

Rise of Digital Currencies

Although Bitcoin was a pioneer in the space, and has subsequently grabbed all the headlines, there are actually dozens of cryptocurrencies which have made their way onto the market. One such example is called Ethereum, which is currently trading at $261 per coin, having began January 1st of 2017 on a valuation of just $8. As a result, Ethereum’s market cap is currently worth an impressive $24 billion, compared to Bitcoin presently worth around $46.5 billion.

Together with other digital currencies such as Ripple, NEM, Litecoin, and Monero, to name but a few, the market has now grown to be worth more than $100 billion. Needless to say, as its size grows, it continues to attract more and more attention from institutions, and as Abigail P. Johnson, chief executive of Fidelity Investments, explains:

“I love this stuff. What if this technology could do for the transfer of value what the internet did for the transfer of information?”

Where great opportunities exist, however, so does the possibility of the market overheating, and as South African internet entrepreneur Vinny Lingham warns:

“There are some real risks right now. [While in the long run bitcoin] will survive and will thrive, I track it daily, and I can tell you now some of the price gyrations concern me.. You’re heading into bubble territory.”