As ShellPay’s CEO Jane Zhang, CMO Laurence Wolf and other ShellPay team members join iGaming industry players in Malta for SiGMA this week, let’s outline how blockchain and this expanding industry can create stronger ties. For those not familiar, “iGaming” is the shorthand for Internet gambling for money or tokens. Over the past 5-6 years, the interplay of the cryptoeconomy with the world of online gambling has created a new phase of evolution for each area. This evolution now has a chance to run in parallel with Malta’s ongoing transformation into the “blockchain island”, as announced at the summit in Saint George’s Bay last month. These changes happen in an interesting context. Since independence from Britain in 1964, Malta’s leaders have created strategies to lift the country from relative poverty on the margins of Europe. The two main political parties followed a pattern laid down by many smaller, often Island nations, involving lower tax, freer regulations and openness to things like online gambling. By the early 2000s the plan for Malta to emerge as a Mediterranean success story was in place:
- Join the E.U. and take advantage of structural funding.
- Create incentives for foreign investment – i.e. a 5% corporate tax rate.
- Improve telecoms – attracting services like call centers, et al.
- Allow foreign applicants to access citizenship for a fee, contributing to a national fund and allowing deeper engagement.
By 2009 government research listed as key players the following: “software developers, financial services, iGaming, aviation, pharmaceutical companies, manufacturers of high value electronic components and R&D, particularly in the medical, bio-tech and pharmaceutical industries.” These ideas – of incentives along with minimal but sufficient regulation – have carried on into new industries, most recently blockchain and crypto. In a similar way, different governments in Valletta have tried to:
- Welcome and regulate online gaming.
- Welcome and regulate blockchain and cryptocurrency.
These initiatives were tied together as responses to situations on the global stage. Before Malta’s accession to full E.U. membership, there were only a handful of online gambling companies in the country. The hundreds of such companies that now exist contribute more than 12% of the Maltese economy, in figures confirmed by the Malta Gaming Authority. Big Spenders coming back to Malta after Centuries: the Westin Dragonara Before that, online gaming was a slow-starting machine, often looked at poorly by central authorities in Europe and elsewhere. Nowadays, in part thanks to Malta’s efforts, it has more respectability. Proof of the value that gambling and related gaming can yield is the cohort of younger foreigners working mid-level jobs in the many gaming companies, their millennial style being easy to spot around Malta’s cities. If blockchain investment continues to grow in Malta, some of the skills acquired in iGaming may prove transferable: how to gamify blockchain to encourage adoption is a question many are asking, while bringing smart contracts and decentralized structures to familiar types of game has unleashed waves of value on Ethereum and EOS.
How can this gaming success continue to interact with blockchain? One way may be to continue to seek original means of transferring value, with enhanced speed, security and/or privacy. We have already outlined how the original ShellPay exchange and tokenization platform, based on SkyBox nodes, can unleash a new, scalable system on which to build decentralized applications and circulate tokens that a community has also already voted upon.
ShellPay CTO Hank Gao underlined the demand for alternative payment and value transfer, saying that iGaming “is a new area for us. Being here we can learn a lot about the industry, and its ecosystem, and potential opportunities. Payment is obviously a key component of the industry, and one where Blockchain technology and crypto can be used extensively.” Some estimates (such as this one from Ernst and Young) have placed the amount of ICO-raised money that has been “lost or stolen” as high as 10%.
The massive valuations and aftereffects created by the giant ICO platforms Ethereum and EOS have led to problems of scaling and security, respectively, leaving an opening for alternative ways to try interactive content with blockchain. For players of games, as well as fast value transfer, security and privacy are key. ShellPay’s structure proposes a post-ICO phase for scaling the cryptoeconomy, whereby community trust within the network keeps nodes running properly (the Obelisk consensus, part of SkyLedger’s technology base) and also determines how tokens enter the exchange. The resulting network is decentralized, fast and contained, yielding each of the key benefits that gamers may seek more of in future.