If you have not spent last few years in a cave, you have most probably heard about bitcoins quite a lot. In simple words, the bitcoin is a type of a cryptocurrency – digital money, not to be confused with digital wallets. The main idea behind the bitcoin is that it is a decentralized and a self-sustainable currency. Even though it has received quite a lot of attention due to the speculation around it, bitcoins are actually disrupting quite a few industries. Today we will take a look at the top 3 industries affected by bitcoins: bitcoin payments, bitcoin gambling and blockchain in banking.
Initially bitcoins were designed as a mean of transferring funds between the users. In fact, the first bitcoin transaction was performed for a very interesting purpose – ordering a pizza. It is believed to happen on May 21st, 2010 and the pizza ended up costing 10,000 BTC, which is roughly $400,000 today. Unfortunately, back in 2010 merchants weren’t accepting bitcoin payments, so 10,000 BTC were transferred to another Bitcoin supporter, who then ordered a pizza. That was quite a bitcoin gambling, wasn’t it?
Today the outlook of the payment industry is completely different. It is possible to use bitcoins to pay for various things – a cup of coffee, logo design, advertising or even a tuition fee in some universities. Bitcoins certainly revolutionise payments as they provide lightning-fast speed of transactions, record-low costs and enhanced anonymity combined with a crystal clear transparency.
Yet there is a dark side to this. As it is nearly impossible to know the identity of a bitcoin wallet holder, this crypto currency quickly became popular for fraud transactions, drug sales and other illegal activities.
It is, perhaps, one of the most underrated niches. Especially when it comes to online gambling. Those of us who rarely visit a casino could never even think of placing bets online. In the meantime, there are such companies in the gambling industry as Playtech. Such companies have market capitalisation of nearly a billion US dollars.
The main disadvantage for those who like to gamble online was an effect on their credit history. Once your bank learns that you have deposited a few dollars to an online casino – you can be easily charged a percent or a few extra on your mortgage. Cryptocurrencies have fixed this trouble by introducing bitcoin gambling.
As BTCs presume a high degree of anonymity, a gambler acquired a few bitcoins, deposits them to a casino and then withdraws gains (if any) back to his bitcoin wallet. Later bitcoins can be easily converted to more common currency units. Today we can surely say that bitcoin gambling is certainly overtaking traditional online gambling.
Banks have been operating without adding many innovations for years. This has resulted in lots of outdated, legacy, systems of core banking. Even though bitcoins are not very useful for the banking sector, the blockchain technology brought by bitcoins is something that will be changing the way banks work in the next couple of years. Such large banks as Deutsche Bank, Santander and even European Central Bank are exploring blockchain right at this moment.
Summing it all up
Even though most of us don’t own any bitcoins, the effects they have on our lives are major. Improvements in some of the sectors, like gambling, are not felt and will not be felt by most of the population, however the impact blockchain technologies bring into banking and payments are going to result in significant improvements.