Bitcoin is big in the world of online casinos. It makes sense: the digital currency is fast, free, and provides you with almost complete anonymity. We’re seeing more and more bitcoin casinos every single month; some of them have even earned our Certificate of Trust. And going into 2016, we fully expect bitcoin to become even more popular with players. But that’s not all we’re predicting.
Regulation will get more strict
When you look up bitcoin on a news site, you’re bound to hear about how bitcoin has become a popular currency for money laundering. And as terrorism, drug trafficking, and other concerns grow more prevalent, governments around the world are taking notice.
This is why many popular exchanges are already implementing KYC (“know-your-customer”) regulations. These require people to provide verification of their identities. This usually isn’t a big deal, but it does go against the anonymous nature of bitcoin.
This year, we expect these regulations to broaden. The Isle of Man may set a new precedent with their Designated Business Act, which will treat cryptocurrency exchanges very similarly to banks. It’s likely that the US will also mandate more licensing and increased scrutiny for transactions with cryptocurrency companies.
Growth will be limited to online casinos and other niche markets
Online casinos are a perfect market for bitcoin. The benefits of virtually no transaction costs, no middle-man, and instant transfers make switching an obvious choice for a lot of players. And with fewer financial costs to worry about, it’s good for the casinos too.
There’s no reason to think bitcoin will make any significant strides in these more “mainstream” markets this year
But as it stands, these benefits aren’t enough to sway most online consumers. People are still perfectly happy using things like credit cards and PayPal for online shopping, subscription services, and ordering pizza. There’s no reason to think bitcoin will make any significant strides in these more “mainstream” markets this year.
Bitcoin start-ups will taper off
Bitcoin was created as a truly decentralized online currency. However, converting fiat currency to bitcoin can be a hassle. That’s why exchanges like Coinbase and BitStamp have been so successful in recent years. And with so many users already happy with these services, we highly doubt that newcomers to the industry will see much (if any) success.
However, there is still a large portion of users who demand full anonymity from bitcoin. As such, sole proprietors could still find moderate success in the P2P markets (e.g. LocalBitcoins).
Banks will hold off on significant investment
Major players in the financial industry like JP Morgan Chase and Goldman Sachs have been toying with bitcoin for the past 2 years. However, bitcoin’s advantages have not outweighed its risks just yet. Banks and investment firms are hesitant to make bitcoin a significant part of their portfolio due to continually changing regulations, fraud concerns, and high price volatility.
2016: Slow, but steady progress
It’s clear that bitcoin is going places, especially in the world of online gaming. But the cryptocurrency’s still got a way to go before it can stand toe-to-toe with mainstream payment processors. It will be interesting to see how things play out in the government and financial sectors, but our bet is that online casinos will continue to be the biggest factor in bitcoin growth this year.