Closing the Loop On the Bitcoin Economy
Bitcoin has a lot of perks for gamblers: it’s anonymous, it’s fast and easy to spend, the fees are close to nonexistent, and it can be spent all over the world (if you use the right proxies). At least in principle, Bitcoin is great. In fact, it’s so good for the Bitcoin casino market that the biggest issue with it (discounting volatility for a moment) is that at some point, you have to interface with cash, which introduces delays and expenses.
So, how do you fix it? Well, the answer comes in the form of a closed-loop Bitcoin economy.
Imagine, for a moment, that most employers let you take home some or all of your salary in Bitcoin, and most of their employees take them up on this to some extent. Further imagine that Amazon, Walmart, and most other major retailers and fast food restaurants accept Bitcoin.
Suddenly, all of these objections vanish: if you want to gamble cryptos on the Bitcoin games, there’s no hassle or inconvenience—you already own them! When you want to spend your winnings (if you have any), there’s also no fuss when it comes to converting, because you don’t have to: you can simply spend it, 90% of the time, on what you want without converting it.
This is a closed-loop economy, of the sort that we currently have with dollars, and it is, roughly speaking, the ‘goal’ of Bitcoin. If Bitcoin can provide a closed loop, global, low-fee, anonymous economy, the technology will have succeeded in every measurable sense.
But what’s standing in the way?
Well, for starters, a large number of world governments with a massive incentive not to let their own control of local currency slip out of their fingers. For another, there are simple market forces that stand in the way: there’s an inertia problem to overcome in terms of Bitcoin adoption. We’ve seen major strides in the last few years, but it’ll be a while yet before bread-and-butter companies like Amazon or McDonald’s begin to adopt the technology.
The payroll side of things is even trickier, although we may see adoption among highly international companies that can benefit from reduced international transaction fees, even assuming two-way conversion costs. Then there’s the volatility—something that’s in decline, but has long, long ways to go before it’s even close to the stability offered by USD.
Right now, Bitcoin exists in a precarious position in relation to the traditional online gambling industry: lots of promise, but not that much to show for it right now. As the loop begins to close on Bitcoin, the situation will start to look quite a bit rosier.
Beating out conventional gambling on total cost and convenience is a big deal, since online gambling caters to fairly impulsive tendencies. More users means more investment, means better services, means more users—the industry is rife with these positive feedback loops, and as we get closer to the Bitcoin economy we’ve been promised since the advent of the technology, we’ll start to see those feedback loops start to propel Bitcoin in some exciting new directions, bringing more promise and innovations to Bitcoin gambling.
I, for one, can’t wait to see it.