Of all the developments in the online casino world, few have had such a large impact as bitcoin. The cryptocurrency has won over tens of thousands of players in the past few years with its instant transfer speeds and greater level of privacy and safety.
But most experts agree that the future of bitcoin on a larger scale is uncertain. Some experts, particularly in the banking industry, feel that the numerous regulatory issues facing the currency are too big of an obstacle for it to meet the hype it has accrued. Bitcoin investors, on the other hand, are more optimistic. That leads us to the ultimate question: who is right?
Why the bankers are hesitant
Prominent bankers have largely spoken out against the growth of bitcoin. Their arguments are usually centered around the role of governments and currencies. Jamie Dimon, the CEO of JP Morgan, presented the crux of this argument in a recent interview with CNBC.
He argued two points. First, that bitcoin does not have the backing of any government entity, offering consumers no protection against the growing epidemic of fraud and anti-money laundering. He stated, “a lot of it is being used for illicit purposes. And people who will get upset with it is governments. Governments put a huge amount of pressure on banks: know who your client is, did you do real reviews of that. Obviously it's almost impossible to do with something like that.”
Another key risk expressed by Dimon is bitcoin’s inherent flexibility. Blocks are generated by miners every day, and it’s hard for the markets to predict how the changing outputs will affect the inherent value of the currency. He states, “It's a terrible store of value. It could be replicated over and over.” This, combined with its price instability, makes it a risky investment.
Why investors are hopeful
Despite the objections of the banking world, it would be foolish to argue that bitcoin has no inherent value. In fact, many investors feel that it is bitcoin’s inherent anonymity and flexibility that make it so lucrative.
Many investors feel that it is bitcoin’s inherent anonymity and flexibility that make it so lucrative
Online gambling itself is a great example of this. In many jurisdictions, getting money into and out of online casinos is not easy through conventional channels, even though it is not illegal. Bitcoin’s instant transfer speeds make it painless for players, and since chargebacks aren’t possible through the blockchain, casino owners don’t have to hold the transactions.
It’s hard to deny that bitcoin has latched on in other areas as well. A growing number of services are offering bitcoin payments, particularly charitable organizations and some online convenience merchants. And with more media exposure, more members of the general public are becoming interested.
All things considered, we’re inclined to side with the pro-bitcoin crowd. Over bitcoin’s several years of existence, naysayers have repeated the same message over and over again despite continued growth in industries like online gambling and payment services. There’s no reason to think that this trend can’t continue.