Whenever a new technology emerges, I inevitably receive a lot of PR material on how it will change the way the casino industry does business; which it sometimes does but just as often does not. The latest technology/concept to proffer this claim is blockchain.
For those unfamiliar with the concept/technology, blockchain was invented in 2008 and its original intent was to be a public ledger for Bitcoin cryptocurrency, according to Wikipedia. In a recent article for The Motley Fool, columnist Sean Williams defined blockchain as:
"... [T]hedigital and decentralized ledger that records all transactions. Every time someone buys digital coins on a decentralized exchange, sells coins, transfers coins, or buys a good or service with virtual coins, a ledger records that transaction, often in an encrypted fashion, to protect it from cybercriminals. These transactions are also recorded and processed without a third-party provider, which is usually a bank."
Indeed, Williams noted blockchain, in his opinion, is a response to the perceived shortcoming within the traditional banking system (the long delays associated with overseas money transfers, for example) and a desire to save money (removing banks as middlemen also removes the fees they charge in currency transactions). He also noted a couple of other advantages blockchain can bring to the financial transactions table:
"For starters, it's decentralized. That's a fancy way of saying that there's no central hub where transaction data is stored. Instead, servers and hard drives all over the world hold bits and pieces of these blocks of data. This is done for two purposes. First, it ensures that no one party can gain control over a cryptocurrency and blockchain. Also, it keeps cybercriminals from being able to hold a digital currency 'hostage' should they gain access to transaction data.
"... Blockchain [also] offers the potential to process transactions considerably faster. Whereas banks are often closed on the weekend, and operate during traditional hours, validation of transactions on a blockchain occur 24 hours a day, seven days a week. Some blockchain developers have suggested that their networks can validate transactions in a few seconds, or perhaps instantly. That would be a big improvement over the current wait time for cross-border payments."
For these reasons, blockchain proponents see opportunity for the technology outside the financial services space; especially for industries that have a customer base that may turn to Bitcoin and other cryptocurrencies, process a large amount of cash transactions and have concerns about security. Hence the interest in the gaming industry.
And, tangentially, it appears some in the industry are warming to the idea. At the recent ICE Totally Gaming show in London, The Gaming Standards Association (GSA) and Gaming Standards Association Europe (GSA Europe) created a new Technical Committee dedicated to blockchain use. According to a press release, blockchain technology is poised to revolutionize data sharing, security and has the ability to provide regulatory authorities with previously unobtainable levels of transparency. GSA’s new Blockchain Technical Committee will collaboratively address the technology and advise on possible areas where standards could be developed.
“Many industries are evaluating how the blockchain technology can enhance data sharing security and increase operational transparency,” GSA Europe Managing Director Mark Pace said. “GSA will launch this new committee and evaluate the creation of a gaming industry standard. This is very timely and may have significant impact on how companies can achieve GDPR and AML requirements.”
As with any new technology, adoption and cost will be the keys to blockchain acceptance and success. But if Bitcoin-like currencies are the wave of the future, it’s only a matter of time before the term “blockchain” loses its exotic nature and joins the workaday casino lexicon.