The Halvening: what is it and why does it matter to egaming operators?
Tim Heath, CEO of the Coingaming Group and GP at Vereeni Investments, on why the online casino sector should be paying attention to bitcoin’s upcoming ‘Halvening’
The Halvening. No, not the latest Jordan Peele horror flick, but the halving of the new supply of bitcoin that will take place later this month, and likely later this week.
In the next few days, bitcoin ‘block rewards’ – that’s the amount of new bitcoin created and distributed every 10 minutes to the people who maintain the network – will halve from 12.5 BTC to 6.25 BTC.
This is significant because it only happens every four years, and this is only the third time it has ever happened.
The crypto community, known for its love of memes, has dubbed the event ‘The Halvening’.
The last time bitcoin underwent a halving was back in 2016, and it was followed by an unprecedented bull run which saw the price of a single bitcoin surge to almost $20,000 by the end of 2017.
The theory followed that the reduction in new supply, paired with an increase in demand, caused the price to rise.
Some are predicting something similar this time but, in all honesty, no one really knows what will happen.
The road to mass adoption
Besides, focusing on the price of bitcoin is missing the point. Since the last Halvening, more significant than the increase in bitcoin’s value has been the increase in its adoption.
More people are using cryptocurrencies on a daily basis, and the online gaming sector is paying attention.
A host of payment providers now allow traditional, fiat currency online casinos to accept and convert bitcoin deposits.
An increasing number of the leading slots providers now provide the option to denominate play on their products in millibitcoin (mBTC), providing a native experience to players.
And of course bitcoin-focused operators are growing far faster than the wider the market. In 2019’s EGR Power 50, the Coingaming Group rose more places versus the previous year than any other operator. But this is not to say that significant challenges don’t lie ahead.
The primary one is educational, and this spans a number of different stakeholders. It means showing players the advantages of placing their wagers in bitcoin, whether that is faster withdrawals or lower fees.
It means educating the wider gaming industry to the benefits of bitcoin, cryptocurrencies and blockchain technology. And it even means engaging with regulators to ensure that suitable licensing frameworks are developed.
The Halvening provides another great opportunity to get people talking about bitcoin. We believe that when people engage with bitcoin and begin to understand it, they’ll soon become converts.
It is the same thinking behind our decision to make bitcoin a ‘sponsor’ of Watford FC, by placing the logo on the team’s shirt sleeve.
With greater adoption should come a more mature market. One of the primary challenges for egaming operators in the bitcoin and crypto space is managing the volatility of these currencies.
The Halvening could be an important step in bitcoin becoming more stable. But then again, if a casino operator is struggling to manage risk, I’d suggest they’ve picked the wrong industry to work in.
So regardless of what happens when bitcoin’s new supply halves in the coming days, and whether that means a price rise or a price drop, education and adoption will remain our focuses.
Only then can we unlock bitcoin’s full potential, in both the gaming space and beyond.
