Tim Rehder is CEO & Co-Founder at Cubits, a European payment processor and platform to buy, sell, manage and use Bitcoin for consumers and merchants. In this article, Tim, supported by industry veterans, argues that while Bitcoin adoption in e-Commerce falls slightly below expectations, iGaming does well in showcasing how cryptocurrencies enhance digital commerce.
Bitcoin has managed to stay in the news, especially the potential to enhance payments and finance, but actual consumer adoption lags the euphoria. However, the iGaming industry is becoming Bitcoin’s stronghold and showcases the network’s qualities, as more and more players use Bitcoin to fund their online gaming accounts.
Online gaming attracts millions of users globally every day. With a market size that increased from 7.4 billion U.S. Dollars in 2003 to 41.4 billion U.S. Dollars in 2015 (http://bit.ly/1xnNU4F), and annual growth forecasts of above 10% until 2018 (http://bit.ly/1UUKuzc), the potential of the industry is undeniable. However, fierce competition keeps online gaming operators on their toes and on the search for an edge to stand out. In that respect, Bitcoin makes for a promising addition.
What makes Bitcoin so attractive to iGamers around the world?
Bitcoin combines the best attributes of an ideal iGaming payment method. Lengthy banking processes are ditched for the most user-friendly way to transact. For gamers, it offers real time transfers – both in and out of their balances – to a selection of platforms all over the world. Especially instant withdrawals, i.e. cash outs, give gamers a feeling of security. Bitcoin also protects their privacy beyond the gaming environment. Naturally, some players also appreciate the chance to win twice off one balance when playing with Bitcoin, due to the intersection of online gaming and currency speculation.
“Bitcoin is the payment choice for the Connected Generation, of digital natives seeking digitally connected entertainment. For the connected generation, everything is and needs to be on-demand, with value and helpful services that make lives easier. Hail a cab, use Uber, looking for companionship open Tinder. Bitcoin provides that adjunct for on-demand gaming experience and gratification. With instant transfers, discreet methods and it’s borderless fulfilment, allowing a payment from anyone, anywhere within the online gaming ecosystem. For those brands that stick to fiat based legacy payment systems, and do not embrace Bitcoin, then it is likely they shall miss out on servicing the most connected generation in human history.” –Tim Heath, CEO at Coingaming.io
For operators, Bitcoin payments offer a highly competitive transaction fee structure that translates into expanded margins and significant savings versus most traditional payment services. Firms can reach a much wider audience since Bitcoin can circumvent local barriers traditional payment methods need to deal with (http://bit.ly/1EQ55CZ). Since online gaming as an industry does not rely on the shipping of goods or supply chains but solely on the flow of funds, the absence of friction of international Bitcoin payments offer the true and invaluable ability to serve the global market. On top of that, Bitcoin is an irreversible payment method, shielding operators from many types of fraud and uncertainty.
It is estimated that approximately 40% of the today’s global Bitcoin volume is related to online gaming, there are over 150 Bitcoin-only casinos and several hundred gambling sites worldwide that accept Bitcoin – a trend that is increasing (Source: http://bit.ly/1EQ55CZ). Bitcoin has started to disrupt the iGaming market and meets all the requirements to become the number one payment method for online gamers.
“Bitcoin originally came onto our radar back in 2012, and we were immediately intrigued by this fascinating technology. At that point in time, there were only a few online gambling operators accepting Bitcoin. However, with the passage of time we have seen more and more reputable and licensed operators joining in this new digital currency revolution. At TAIN, we have always been looking at upcoming developments in the online gambling space, which is why we have integrated Bitcoin fully into our platform and are able to offer a full range of online gambling services utilizing Bitcoin to all operators on the TAIN platform. The ease and simplicity of Bitcoin transactions is shaking up the way we transact online. At TAIN, we feel very positive about being on board with this exciting 21st century innovation.” -Christer Fahlstedt, CEO at TAIN
Cubits’ role in iGaming
We at Cubits offer a variety of services. Users of Cubits can buy, sell, and store their Bitcoin securely in the Wallet Cubits offers them. Buying Bitcoin over a number of payment methods (including Sofort, OKPay, OBT/Skrill & credit cards) can be done in just a few minutes. Business clients can accept and pay out in Bitcoin, choosing their exposure to Bitcoin at every stage of the process. The company has put a major focus on the security infrastructure behind its software.
Soon after our launch, we started eyeing the potential of the iGaming industry and started building tailored solutions for both hybrid fiat/cryptocurrency platforms and pure cryptocurrency businesses, something that our partners appreciated.
“Our partnership with Cubits began around a year ago. We had been looking to partner with a Bitcoin payment processing provider for a while to extend our own, but all solutions available in the market didn’t seem a perfect fit. We always carefully select software partners, literally paranoid about informational security and how prospective partners treat it. Finally, we found Cubits. We chose them because they had the highest level of technical expertise and the strongest focus on security that we had ever seen in the Bitcoin industry. Their platform is reliable and bulletproof, and organisationally they are very flexible as well.” –Ivan Montik, CEO at Softswiss
The iGaming industry is a perfect sandbox to develop great applications on top of the blockchain. We developed various innovative API features that allow for real-time tracking and instant acceptance of Bitcoin deposits and remain the only European player to offer such a solution for businesses. The benefits are fast and secure Bitcoin payments for a more efficient transaction process, attracting well-known players from the industry such as Betconstruct, Betsat, Löwenplay, Gametwist, among many others.
“Cubits opens doors to a large new customer base and offers our customers an alternative payment method, which protects their privacy, improves their user experience and simultaneously protects us from volatility. What else could you want?” –Paul Kase, Co-Founder & Managing Director at Lionline
The automated cash-out in Bitcoin and Cubits’ instant conversion into 17 fiat currencies are just some of the reasons for its popularity. Zero Bitcoin price volatility risk for operators and players as well as protection against double-spending attacks add to the attractive bundle of features. Cubits already services over 150 iGaming clients and has built an outstanding reputation in the space thus far.
“Through Cubits, we can offer our customers a seamless user experience. Paying with Bitcoin offers characteristics that are crucial for stakeholders in the iGaming industry. We believe in the potential of Bitcoin and we are looking forward to a prosperous, long-term partnership.” –Hartmut Weber, CEO at Arland
With support for unique Bitcoin addresses directly tied to the user’s account on the specific platform, Cubits enables seamless funding for any online gaming website. This and the aforementioned features offer customers the most convenient and easy way to p(l)ay.
As previously stated, the iGaming industry is a great place for Bitcoin innovation and testing. Cubits tries to chip in and build payment solutions that can then be rolled out throughout other industries.