EEGReport Magazine: Experts believe that in the coming years Bitcoin will develop at about the same speed as not so long ago Internet did. Do you also adhere to this theory?
Tim Heath: If we look at the speed of disruptive technologies, such as the Internet (http protocol) and Email (smtp), it takes time for such advances to propagate throughout society, specifically the time between the early adopter group and the masses. However the movement from early adopter to regular user is most certainly more rapid than other such innovate / disruptive technologies we have seen in the past.
At the moment, Bitcoin is simply to complicated for the average user, but conceptually it’s an easy concept to understand (once explained). I think this is because users know how to use bittorrent, or how skype works from their everyday use cases, but most often don’t understand (nor want to) the underlying technology. Skype (and VOIP) is an amazing technology, but I really do wonder how many average consumers understand the technology and the rails & protocols it runs on. Skype have made a very simple user interface to point and click, to call or video to someone on the other side of the world, for free. Therefore, perhaps we should not view Bitcoin technology as the “ultimate” goal for adoption, but rather simply the “rails” on which a trusted transaction is made and the end user simply uses a nice user interface to click “send money to a friend from my contact list”.
Perhaps to this end, the end goal (or killer Bitcoin app), is that someone can buy $20 of Bitcoins from a friend and in the background, that amount is hedged immediately, to ensure there is no volatility in the Bitcoin price which may effect their whole experience. This money could then be sent to a merchant, gaming site or used as remittance to another country. The transaction would still take place over the blockchain, but in the end user’s eyes, they see the non-technical transaction (which one would say looks and feels like any paypal transaction), just that it happens over a decentralized network with no fees to “send the money” safely and securely.
EEGReport Magazine: Full anonymity of Bitcoin transactions – is it advantage of disadvantage?
Tim Heath: Bitcoin is Pseudonymous not anonymous.
Our primary KYC resolves around a player’s digital footprint, rather than traditional (and as some would agree, forgeable) utility bills. That said, players are happy to be KYCed in traditional ways due to o gaming license requirements. This is because we have found that player’s prefer that their Bitcoin gambling transactions are “not obvious” to family / friends. Therefore when depositing to a Bitcoin casino, there are no deposits from a joint bank accounts or credit card statement. Most importantly however, is that there is no gambling transactions on their bank statements which may harm future loan or mortgage applications (through traditional banks).
EEGReport Magazine: Absence of clear scheme for Bitcoin regulation and for its taxation disaffect – is it a key issue for investors?
Tim Heath: Regulation is needed is the onramp / offramp of fiat currency to Bitcoins and vice versa. This is where governments should have sensible regulations in place; that Bitcoin exchanges should know their customers and understand the sources or destinations of incoming or outgoing funds. In regard to taxation – this is a situation for the jurisdiction where the company is based, to know and pay their respective corporate taxes. Taxation is based on the annual reports filed in the relevant jurisdictions and have nothing to do with a Bitcoin transaction.
These issues don’t seem to be slowing down Venture capital investment into Bitcoin or blockchain related companies. In Q1 2015 there was a record breaking amount of venture capital invested in Bitcoin startups, over $229 million (a total of $676 million so far).
EEGReport Magazine: What are the benefits received by casino if shifting to Bitcoin payment system?
Tim Heath: Bitcoin is perfect money for the Internet:
- You can send or receive $0.01 or $10 million+ instantly anywhere in the world
- It is irreversible
- There is no chargebacks or fraud
- There are no payment processing costs
- There are no 3rdparties “holding the money”
- All transactions are peer 2 peer and auditable on the blockchain
- Escrow services exist in the blockchain code.
Therefore when a casino utilizes Bitcoin as a payment method / gaming unit, all deposits and withdrawals are instant. We are seeing a huge increase in localized options for conversion between fiat and Bitcoin and vice versa, which is rapidly growing Bitcoin’s accessibility. It’s also very clear and logical, then the faster withdrawals are processed by a casino, the greater confidence a player has (in the casino) and the faster they will re-deposit.
Of course any business would love to have 0% merchant processing fees and to completely remove fraud and Chargebacks from their profit / loss statements…