What is the Real Product Market Fit for Blockchain Payments

Convenient payment channels are one of the most powerful sides of cryptocurrency. Since blockchain-based coins and tokens gained credibility in the past decade, the option to pay in crypto is rare, but still present and promising. 


One of the use cases for Bitcoin and other crypto payments involves the ever growing online gambling industry. The total global payment market, which includes retail, subscriptions and other consumer behaviors, reached $3.2 trillion in 2020. The year market a peak in payment technology, with the added effect of the pandemic expanding the demand for safe, transparent payment channels. 


In the years leading up to the current payment processing market, users were already expanding their usage of digital wallets and mobile devices for payments. The chief concerns for payment processing were safety and fraud-proof transactions. So far, blockchain-based payments are a small fraction of total money transfers. However, they have a niche role in gambling sites, where their immediate, fraud-proof features help users access otherwise cumbersome payment mechanisms. 


The global gambling and betting market has expanded to more than $44B in 2019. In coming years, growth of up to $66B remains within reach. Of that entire market, the share of crypto-based casinos is still small, though with a large potential for growth. Even traditional gambling and betting sites offer some forms of crypto-based payment processing. We tracked three prominent gambling projects riding the crypto payment processing wave to show a significant product market fit for digital coins. 


WINk, TRON-based Crypto Casino


WINk is one of the most active, purely crypto-based projects in gambling. We picked it as an example of the potential for growth in that space. 

WINk used one of the fastest crypto assets, WIN. This is the chief advantage of the network, which along with the TRON protocol manages to achieve fast, frictionless crypto transactions. The casino games available are accessible immediately to WINk network users. 

Thus, WINk lines up among the most active crypto-based casinos. The network carries $13.6M in volume, which is relatively small in comparison to fiat-based gambling sites. 

The disadvantage of WINk is that it targets potential players already quite familiar with crypto assets. Partially, the fame of TRON helps this project. The other positive factor is the significant demand in Asia for gambling platforms. The project illustrates the growth of new opportunities that start entirely outside the banking and payment app ecosystem, and operate entirely on crypto wallets.


888Casino


888 Holdings is the firm behind 888 Casino. The company, established under New Jersey jurisdiction, is already a significant player on the gambling and betting market. The casinos went through a total redesign in 2019, opening up the doors to a modern, appealing gaming experience. 



Online gambling and gaming is inherently scalable, as more users demand fast access to table games, slots, poker and other types of games. One of the biggest challenges is to ensure enough payment channels to reach most of the world’s regions. 

Fintech apps have helped significantly in expanding services despite the lack of easy and cheap banking connectivity. Even fintech apps pose limitations for some regions when it comes to crossing the last mile from the app to a bank account. 

For that reason, 888Casino can potentially benefit from the product market fit of integrating crypto payment channels. Several types of cryptocurrencies have established themselves as tools to send funds quickly. Additionally, due to the global interest in crypto assets, most regions have a pathway to turn crypto into fiat. It is also possible to keep the funds entirely in crypto assets, to avoid taxation or delay selling. 


BitStarz


BitStarz is among casinos advertising themselves to a wide audience even outside the world of crypto enthusiasts. Still, this casino accepts Bitcoin payments, relying on the fact that BTC remains the most well-known and widely accepted crypto asset. 

The casino is highly competitive, attempting to sell aggressively to players. The BTC payment is also asked in bulk, through a rather significant initial deposit. This does not fit with more gradual approaches, where crypto-based gambling can be done with any sum selected. 

BitStarz has some flaws that may lead to significant losses. For that reason, it is best to search out casinos that have agile payment integration for crypto assets. Still, BitStarz is a warning about overly aggressive marketing with potentially unfair performance.


Bao Casino

Bao Casino is a newcomer to the gambling space. The casino is relatively new, with still a limited selection of games. Bao Casino follows most of the modern practices for online gambling. It has targeted varied geographic regions and their most widely used Internet service providers. 

Bao Casino trusts mostly the most well-established fintech and payment apps, available worldwide and with special terms for the European Union and the Euro area. For now, those options are viewed as somehow limited, and there is no sign of adding crypto payment options soon. 


In 2021, there are multi-sided approaches to building a fair and safe casino integrated with crypto payments. As we already mentioned, the decentralized casinos built on Ethereum, TRON, EOS and other platforms are setting an example. For those platforms, participation, security and payments are all handled by their respective blockchains. 


At the same time, crypto payment integration is possible for almost any type of gambling site. Using BTC or another crypto asset have several advantages. Firstly, they are pseudonymous, not linked to a real-life identity the way that fintech apps are. Casinos may choose to perform KYC for their players, but their deposits in crypto have a higher level of protection.


Adding crypto payment options also expands the possible outreach of games to crypto fans. 


Currently, BTC remains a tightly held asset. However, there are multiple other coins or tokens that could be used as payment channels. 


One of the biggest problems for blockchain payments is the inherent volatility of coins. The unpredictable price movement is a hamper to integrating crypto as a payment tool. One of the possible approaches is to use dollar-pegged stablecoins, which preserve their value and offer the same benefits of secure blockchain payments. 


The other hurdle is the presence of multiple different protocols, which can complicate deposits. For merchants that rarely accept crypto assets, the preferred option is to limit themselves to a handful of wallets for networks that have a good security and have no history of double-spending attacks. 


Despite the hurdles, the significant growth of parallel demand for online gambling and online payment systems opens a significant opportunity for cryptocurrency payment integration.