NEW YORK—Forbes.com took a look at the intersection of bitcoin and online gaming today in an article titled, “Bitcoin Payments Could Quickly Become Competitive Wedge In Online Gaming.” Written by contributor John Matonis, the article opens with a rhetorical question that automatically extends its subject-matter beyond gaming (to porn): “Have you ever wondered why new technology tends to be exploited in the adult entertainment and online gambling industries first?”
Matonis answers immediately, “An ultra-competitive market environment and a willingness to try anything in the quest for traffic and profits has made these two industries technology’s early adopters. Typically, innovations that start in these fields go on to become core features in more mainstream commercial applications.”
The new kid in town is wild boy bitcoin. “Now,” writes Matonis, “a new digital currency threatens to disrupt the old payments paradigm and it’s no surprise that it is gaining traction in the online gaming world. Bitcoin payments could quickly become the preferred competitive wedge in online gaming.”
That, at least, was the consensus they got after visiting two recent Netherlands-based gaming trade shows, where “it became clear that bitcoin is indeed picking up momentum in online gaming.”
Adoption is not uniform; some of the bigger players are still sitting cautiously on the bitcoin sidelines—“they confessed to me that, although they appreciate Bitcoin technology, the two primary reasons for holding back on adoption are the additional unwanted scrutiny from gaming regulators and the fact that players aren’t demanding it”—but as we also see in the adult biz, “The young industry upstarts do not feel plagued by those concerns.”
Greater adoption makes sense, says Matonis, and again his reasons why are equally applicable to the adult entertainment industry.
“Bitcoin,” he avers, “is the ideal digital casino chip — immediate, irreversible, and private. Here’s a sample of its extraordinary benefits to gaming companies worldwide:
1. Extend acceptance to 60+ countries not reached by Visa, MasterCard, and PayPal and to markets with weak banking penetration, because bitcoin is accessible with only an Internet connection;
2. No disallowed or blocked merchant category codes (MCCs) typically seen with centralized payment networks;
3. No possibility of a politically-motivated payments embargo or confiscation of holdings by a third-party intermediary, because bitcoin’s public ledger is decentralized;
4. Eliminate costly merchant chargebacks and fraudulent transfer reversals due to bitcoin’s payment finality;
5. Realize dramatic savings on processing fees that approach zero, because bitcoin fees are user-determined and substantially less than conventional payment methods;
6. Achieve near immediacy of payment settlement in both directions when compared to wire transfers, because bitcoin confirmations occur in about 60 minutes, more closely resembling a live casino environment.
There are huge differences between gaming and porn, of course, but their similarities are even more pronounced when seen through the prism of bitcoin adoption.
