Founder of Bitcoin Embassy Georgia Speaks at Georgia Gaming Congress
Alex Sudadze, a speaker at the Georgia Gaming Congress (GGC) 2017 and founder of Bitcoin Embassy Georgia recently did an interview with GGC to share his thoughts on the use of cryptocurrencies in gambling. He shared a number of interesting key points online gamblers should know. There a few things in what he said, though, that could use some clarification.
Erasing Geographical Boundaries and Providing a Better Payment Method
In response to the question on what online gambling tasks does bitcoin solve, Sudadze first mentioned the increasing popularity of online wallets. He noted how these online wallets are being used not just by individuals but also by small and mid-sized organizations. They provide reliability and fee advantages. Sudadze then implied the many advantages of introducing the option to top up online wallets with bitcoins.
“Imagine how interesting it is: you are offered to replenish your casino balance using an international currency that is hundreds of times more expensive than a fiat one, doesn’t depend on inflation, and the main thing – it cannot be falsified.”
Indeed, bitcoin is an international currency and it does help remove geographical boundaries for financial transactions for online gambling. Having the option to top up an online wallet with bitcoins is certainly advantageous. However, bitcoin’s virtual immunity to falsification is not a compelling argument. After all, bank transfers and other online fund transfers share the same characteristic. They’re virtually impossible to falsify although identities and account logins can be stolen to make payments or withdrawals. Additionally, it’s important to bear in mind that while bitcoins are highly secure when kept in offline or cold storage, they are not as secure when deposited in online wallets or the accounts of gambling sites.
Also, users need to get accustomed to the high volatility of bitcoins. Today it may be under $1,000 but tomorrow it can be valued at almost $2,000. It is not clear what will be, but the bitcoin is currently in a position to only gain value as the Chinese government and other countries continue to get actively involved in the blockchain and mining.
Moreover, for online casinos that also use fiat currencies, it can’t be said that bitcoins are not affected by inflation. When bitcoins are converted to other currencies, their value changes in relation to changes in the values of fiat currencies. Also, there are online casinos that accept bitcoin deposits but are automatically converted to their fiat currency equivalent when used in the casino. If a user deposits bitcoins but selects USD or EUR, for instance, the bitcoins are indirectly subjected to the inflationary movements of the fiat currency being used.
Those Who Use Bitcoins May Not Protected by Law
Another important point raised by Sudadze is the lack of laws and government regulation of bitcoins. He agrees that bitcoin users cannot be protected by governments if this cryptocurrency is not being recognized as a currency in their country. He also acknowledges the negative tax impact of the use of bitcoins. However, he asserts that these don’t affect the security of bitcoins. Hackers may be able to access the data center of a casino but they are unlikely to take over the individual bitcoin wallets of players.
As such, it is the responsibility of players to make sure that their bitcoin wallets are properly secured. They are unlikely to be able to sue an online casino for bitcoin fraud or theft if bitcoin is not a recognized currency in their country. Online gamblers who are able to go around their online gambling laws by using bitcoins cannot expect their laws to help them if they lose their bitcoins. The bottom line: if players use bitcoins to avoid regulation, they should not expect the regulator to help them when they encounter problems.
The use of cryptocurrencies like bitcoin allows online casinos to reach a wider audience too. Bitcoins can be used anywhere by anybody. As Sudadze said, “the application of cryptocurrencies erases geographical boundaries, providing the company with unlimited opportunities.”
This, however, has to be taken in view of the online gambling laws in different countries. Many online casinos that accept bitcoins still have to impose country restrictions because of online gambling laws. It’s also worth emphasizing that online casinos hold players responsible for determining whether or not their local laws allow them to engage in online gambling. If a player in a country with strict online gambling laws plays in an online casino, the casino can terminate the account and forfeit the winnings accumulated.
“Initially, it is designed for technically advanced gamblers,” Sudadze said. “However, the bitcoin exchange system has become so user-friendly that more people are getting familiar with cryptocurrency wallets,” he added. In short, bitcoin support in online casinos is apparently meant for everyone interested in online gambling.
Alex Sudadze spoke last week at te 2017 Georgia Gaming Congress in Tbilisi. The event centered on the development of land-based and online casinos, fantasy sports, eSports, as well as the role of new technologies such as virtual reality, augmented reality, and blockchain in the gambling industry. The Georgia Gaming Congress had investors, eSports representatives, owners of betting shops and totalizators, and online casino managers. Fantasy sports experts, cryptocurrency experts, gaming equipment manufacturers, future owners of gambling operations, as well as gamblers and junket tourists attended. Sudadze spoke to loud applause and cheering as the founder of Bitcoin Embassy Georgia.