Will Bitcoin Be Regulated In The Future And What Will It Mean For Online Casinos?
Bitcoin is not a brand new concept. In fact, it’s been around since 2008 and is only a year away from its 10th birthday, but that doesn’t mean that we fully understand just yet where this digital asset could go. For those who have managed to miss the hype of the past few years, Bitcoin is a cryptocurrency that uses a system called the blockchain to control its creation and transaction management. There is no central authority that controls this currency, which is actually one of the biggest reasons that Bitcoin has become so popular on the World Wide Web and beyond – so much so that the worth of this digital currency has soared in the past 9 years, with 10,000 bitcoins getting you 2 Pizzas in May 2010 and only 1 bitcoin getting you upwards of thousand Pizzas in May 2017!
The gambling industry has been far from immune from the Bitcoin fever. In fact, online casinos have taken the opportunity to use an anonymous, decentralized currency with both hands. After all, the security and control that a self-efficient currency gives to the gambling community are hard to pass up. But what does the future of Bitcoin actually look like? Can we really predict whether Bitcoin could become regulated? How will this affect the online casino industry? You’ll have to read on to find out!
Is Bitcoin on its way to being regulated?
If there’s one thing for sure, it’s that if you’ve noticed Bitcoin is growing, governments around the world have too. In fact, only in April of this year, Japan introduced legislation surrounding Bitcoin in their attempts to reform the country’s tax bills, recognizing Bitcoin as an online payment method for the first time. This kind of recognition is what can ultimately lead to regulation – after all, governments like to and are there to control things and a decentralized cryptocurrency like Bitcoin makes it difficult to do just that. With Bitcoin being recognized as a legitimate payment method comes businesses picking it up beyond their online systems. Restaurants and store owners are all beginning to accept Bitcoin as legitimate payments for their food and services and while this is all well and good, the further Bitcoin can stretch, the more it’s likely to be regulated to prevent money laundering and illegal payment use.
As it currently stands, Bitcoin is a cryptocurrency that goes mostly untaxed. The UK, for example, still has a grey area around the topic of Bitcoin, and so any transactions completed with this digital payment method are currently VAT free. But other countries aren’t quite as grey about their policies. Israel, for example, is well on their way to introducing capital gains tax on Bitcoin sales though this would be the equivalent of treating Bitcoin as an intangible property as opposed to a kind of foreign currency. Australia, on the other hand, is considering taxation, but as opposed to capital gains, they’re considering adding a sales tax to any digital currency purchases. In short, the question isn’t whether Bitcoin is on its way to being regulated, but instead becomes a question of when and how it is going to be regulated.
What kind of effects could regulation have on Bitcoin?
While the age of regulated fiat currencies means we can make general predictions on the effect an event can have on its value, it can be difficult to predict the same with cryptocurrencies in the same way. However, all is not lost! The world’s reactions to digital currencies and their previous and current fluctuations are good indications of just what regulation could do to Bitcoin in the future. Take China, for example. In February 2017, it was announced that two of China’s major exchanges had suspended all Bitcoin and Litecoin withdrawals for a full month and the value of Bitcoin reacted accordingly. In fact, the value dropped sharply not only for Bitcoin and Litecoin, but for all cryptocurrencies. In America, the Bitcoin Foundation has obtained legal counsel in their fight against regulation in the USA. The foundation believes that any regulation increases are in fact attempts to “control and stifle the adoption and use of so-called ‘virtual currencies’ such as Bitcoin” – And they might have a point.
But, with every discussion, there is a counter-argument. In fact, experts in the field believe that regulation for Bitcoin could actually help it grow and thrive. Mass-adoption of the cryptocurrency, or any digital currencies for that matter, is practically impossible without any regulations. Small businesses and start-ups often don’t have the assets they need for enough of a safety net if their cryptocurrency use falls through. So, while bigger businesses can adopt Bitcoin and other digital currencies, smaller companies often won’t take the risk.
How will the regulation of Bitcoin affect online casinos?
To any Texas Holdem poker player or basically anyone looking for better ways to manage their poker bankrolls or optimize their payment methods, Bitcoin can seem like a godsend. A decentralized, anonymous and ultimately secure cryptocurrency has made gambling online safer than ever, but with the increase in cryptocurrency understanding and use, it can pose its problems. Bitcoin, despite having been around for nearly 10 years, is – in a sense – still in its infancy. The currency is rocketing in worth, but there’s no guarantee for stability and just how companies could cope if everything suddenly went wrong. The transparency within cryptocurrency, even with its anonymity means that, in theory, this cryptocurrency should be the safest payment method online today. But is it?
With every good thing comes those that want to take advantage, or ruin it completely. Bitcoin has its cowboys, with theft and dishonesty possible in cryptocurrency even with blockchain technology. John Caldwell, former PokerStars Marketing Executive, states that it’s important to think of technological and regulatory safeguards first. The online casino industry is a big one, and if cryptocurrencies are being picked up on a larger scale, regulations may need to be put in place to some extent to keep everything running smoothly and safely to ensure security and legality.
Could Bitcoin’s future actually lie in regulated online casinos?
So regulation of Bitcoin could play a pivotal role in keeping Bitcoin-friendly online casinos and their punters in check, but is this really where this cryptocurrency’s future lies? Bitcoin offers online casinos a whole range of advantages that most would be crazy to pass up. With no chargebacks, transaction fees are pretty much non-existent, and with cash-outs cleared within a few minutes, Bitcoin use for your online gambling needs can help things run far more smoothly than ever before. Whether you’re looking to play different types of poker or just test your luck on the slots, Bitcoin offers anonymity with your spending, all while keeping everything far more transparent than fiat currencies could ever be.
Online gaming, whether casino or platform, has always been at the forefront when technology becomes available. Adopting a new software has never been a problem for online gamblers, and Bitcoin has been no different so far. However, there is still quite a way to go before casinos fully adopt Bitcoin as a regular payment method. Most online casinos adhere to some kind of regulations, and with Bitcoin currently sitting as an unregulated cryptocurrency, it can deter punters from using and paying with this method.
The question remains – does Bitcoin need to become regulated to have a future in online casinos? Or do online casinos need to adopt Bitcoin to help regulate this decentralized cryptocurrency? The general census seems to be that both can benefit from one another, but only time will tell whether Bitcoin will be adopted on a mass scale across regulated online casinos.