Bitcoin has regularly made the headlines in recent months, its price surging towards the $5,000 mark - four to five times its value at the start of 2017 - predominantly driven by interest in Asia.
It has also emerged as a viable gaming currency, with online operators discovering that users, particularly in Asia’s grey markets, are keen to embrace a currency that is secure and easily deposited and withdrawn.
Several Bitcoin-led operators, including Bitcasino.io and Cloudbet, have enjoyed rapid growth by simplifying and accelerating the deposit and withdrawal process, particularly in markets where banking restrictions make depositing fiat currency on gaming sites a challenge.
But this might be just the beginning of a wider revolution in blockchain gaming that could seriously threaten the established order, and even has Asia’s biggest lotteries in its sights.
In recent months several initial coin offerings (ICOs) focused on the gaming industry have raised significant funds.
ICOs, or token sales, are a means of crowdfunding that tend to use the Ethereum blockchain - a variant of the technology that backs Bitcoin - and its associated cryptocurrency, Ether.
The most notable of the gaming ICOs so far is FunFair Technologies, led by tech entrepreneur Jez San, which raised around $26 million in both Bitcoin and Ether in just four hours during its ICO in June.
FunFair aims to build a decentralized gaming platform powered by Ethereum smart contracts.
The Ethereum blockchain can allow casino games to be conducted in a manner which is fully verifiable and open to both player and operator by eschewing servers and running the casino’s functionality directly through the blockchain - essentially a public ledger accessible to all and secured by cryptography.
These smart contracts, for instance, pledge to pay out winnings dependent on the result of a game, are automatically executed on the blockchain itself. This holds a number of advantages, particularly in markets where players are concerned that online games are not safe and fair.
Another similar project, Wild Crypto, held an ICO at the start of September to raise funds to bring its blockchain-based online lottery platform to market.
“The Wild Crypto platform will harness the full disruptive power of the blockchain, and is designed to shake up the global lottery industry,” Andrew Jarrett, Wild Crypto’s technology business and gaming advisor, told AGB.
“We will offer a completely open, verifiable and fair platform for customers to play lotto games on. It is an offer that should worry any lottery which is failing to engage players, particularly younger demographics, via the innovative use of technology,” Jarrett said.
According to the World Lottery Association, Jarrett added, only 4 percent of the $260 billion lottery and associated games market is currently online, offering projects such as Wild Crypto “a huge opportunity”. The Wild Crypto ICO pre-sale raised 2000 Ether (around $600,000) in just 96 seconds.
The future of blockchain gaming?
Whether these Ethereum-powered ICOs prove to be the future of blockchain gaming, however is another question.
Both Ethereum and Bitcoin have their advantages. Ethereum’s technology offers greater flexibility and the opportunity to build a platform upon the blockchain; Bitcoin, meanwhile, is far more established as a gaming token and appeals as a simple way to deposit and withdraw swiftly and securely.
Jarrett at Wild Crypto said that while Bitcoin has an important role to play, Ether will be the cryptocurrency to revolutionize the sector in Asia and beyond.“From an innovation standpoint, Bitcoin can only serve as a currency with which to gamble. We are thinking bigger than that, and the future of gaming will be built on the Ethereum blockchain,” Jarrett said.
However, Tim Heath, CEO of the Coingaming Group, which operators bitcoin-led casino Bitcasino.io, told AGB that Bitcoin, particularly in Asia, will remain the cryptocurrency of choice when it comes to gaming.
Bitcasino recently launched dedicated Japanese and Chinese-language websites as part of a broader rebrand in response to significant demand from Asia.
“Asia’s unique regulatory challenges have seen many in the region embrace Bitcoin as a gaming currency,” he said.
Bitcasino has no current plans to begin accepting other non-Bitcoin cryptocurrencies, known as altcoins, unless there is major demand from players.
Oron Barber, CEO of Australia-based Bitcoin media and marketing agency CoinPoint.net, agreed that, for the time being at least, Bitcoin casinos would maintain their lead.
“In the near future the market will follow the existing and new Bitcoin casinos which are providing great content and service,” he told AGB.
However, he said the growing number of ICOs, which span platforms, operators, affiliates and slot providers, will likely begin to impact the industry by mid-2018.
As well as transparent and verifiable gaming, the blockchain could theoretically facilitate everything from live payments for affiliates to the pooling of jackpots across multiple operators or suppliers.
This will concern Asia’s major lotteries, and China’s introduction of a ban on companies raising money via ICOs at the start of September may have in part been accelerated by the number of gaming-focused ICOs on the horizon.
But this is unlikely to halt the growth of cryptocurrency as a gaming medium in Asia.
Asia Gaming Brief is a news and intelligence service providing up to date market information for worldwide executives on relevant gaming issues in Asia.
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