Bitcoin News
Daily diary of what's happening with Bitcoin.
NPR aired a Morning Edition segment with host Cyrus Farivar (@cfarivar) in which Jerry Brito (@JerryBrito) was interviewed about online gambling and Bitcoin. Excerpt:
“The U.S. Justice Department has made it very clear you can’t just open an offshore casino online and start taking bets using actual money from the United States. But last year a couple of entrepreneurs asked themselves ‘what if you were only betting with Bitcoin?’.”
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“Noone knows if bitcoin is money, a financial instrument, or something else.”
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“[Bryon Micon of SealsWithClubs.eu] says it might be tough for the feds to regulate what is just a piece of computer code and not real money.”
- http://www.npr.org/blogs/alltechconsidered/2013/02/06/171182974
- http://bit.ly/UXWzZ4 (MP3 download)
- http://bitcointalk.org/index.php?topic=141530.0 (Further discussion of this broadcast)
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Forbes contributor and Bitcoin Foundation (@BTCFoundation) board member Jon Matonis (@JonMatonis) shares some details from leading online gaming services where bitcoins are used as the currency. Excerpts:
“SatoshiDice reported first year earnings from wagering at an impressive ฿33,310. During the year, players bet a total of ฿1,787,470 in 2,349,882 individual bets at an average monthly growth rate of 78%. […] The odds are calculated to give the house an edge of 1.90% with full transparency because all dice rolls and earnings statistics are verifiable using the blockchain. […] SatoshiDice shares are traded on the MPEx bitcoin [cyber-equities] stock exchange […]. At the current exchange rate of $17.00 per BTC, SatoshiDice is a company valued at $8.9 million.”
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“BitZino reported first year earnings from wagering of ฿10,137. During the year, players bet a total of ฿664,192 in 3.2 million individual bets. […] [From June to December BitZino saw] a period growth rate of 894% or average monthly growth rate of 149%.”
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“Seals With Clubs is dealing about 10,000 hands of poker per day and raking only about 4,000 of them. […] The current rake is 2.5% with a cap of ฿0.10 per hand which is slightly less than half of what other poker sites would charge.”
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“With privacy, efficiency, growth, payment irreversibility, and cost savings as demonstrated by the above, it’s only a matter of time before the mainstream casino operators of Gibraltar and Malta realize the benefits of a gaming economy that leverages the ideal digital casino chip.”
- http://onforb.es/10DVrxq
- http://bitcointalk.org/index.php?topic=138032.0 (Further discussion of this article)
- http://tcrn.ch/Wgetql (Related article on TechCrunch)
- http://bit.ly/W06gXC (Related article on The Verge)
- http://ars.to/10QcVYw (Related article on Ars Technica and Wired.co.uk)
- http://bit.ly/10JloM3 (Related article on Boing Boing)
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Steven Stradbrooke posted on CalvinAyre.com (@CalvinAyreNews) regarding Bitcoin’s advances made in use for online gambling. Excerpts:
“Bitcoin seems an ideal payment solution for online gambling sites, yet adoption has been confined to the sector’s smaller operators. None of the major gambling sites we spoke to would even cop to having had internal discussions regarding offering a Bitcoin option to their players.”
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“SwitchPoker’s use of Bitcoin was not without its challenges, such as the fact that ‘all payments are final.’ Bitcoin’s ability to forego the use of banks and online e-wallets by sending payments directly to the consumer eliminates the ability to reverse a transaction. ‘This means that fraud issues need to be handled differently. Extra checks are performed before sending Bitcoin payments out.’”
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“‘Bitcoin’s potential pitfalls are vastly outweighed by its strengths’ [says MacCarthy]. ‘Unlike almost every payment method, if we receive a Bitcoin payment we are certain that the funds are deposited legitimately. Overall, Bitcoin has reduced our fraud-related costs significantly.’”
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“McCarthy says once users give Bitcoin a try, ‘they tend to stick with it, whereas customers who do not use Bitcoin would often switch from one payment method to another.’”
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“Micon [with SealsWithClubs.eu] told CalvinAyre.com that it was currently easier to convince Bitcoin devotees to play online poker than it was to convince poker players to use Bitcoin. “We are still only to the early adopter stage of this technology.”
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”Seals ‘does no banking whatsoever’ with US institutions, ‘only Bitcoin in and Bitcoin out’,”
- http://bit.ly/Q3VDBh
- http://bitcointalk.org/index.php?topic=124437.0 (Further discussion of the topic of Bitcioin and gambling)
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An article on Pokerlistings.com describes how Bitcoin can be used to overcome the restrictions preventing online poker play today. Excerpts:
“Bitcoin represents a potential paradigm shift in the online poker world as it could easily bypass the number one issue that has plagued online poker from day one: payment processors.”
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“Since the entire system is open-source and online there are fears it could be hacked. Bitcoin has only been in existence for a few years and many economists still consider it an experiment. Here’s perhaps the most surprising thing about Bitcoin, however: It’s working.”
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“Bitcoins are simply used to buy chips on online poker sites. Because banks are not involved there is no way for government agencies to restrict people from using Bitcoins on whatever they want.”
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“What if your choices are $6 rake ‘Bellagio Online’ vs. mostly professional Nevada-based opponents or .1 BTC rake SealsWithClubs vs. randoms from around the world?’ ’Bitcoin sites can gain a competitive advantage in a USA-legal online poker landscape by keeping the rake extremely low and by spreading the games that players want to play’ [said Bryan Micon]”
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“‘The chart looks very similar to the price of silver, which went from $50.00 per ounce to $4.00 per ounce and then back to $50.00 again. No one says silver isn’t money!’ [said Jon Matonis]”
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“[Bitcoin gives] us a preview of what the online poker world might look like without borders and boundaries.”
- http://bit.ly/R5j6NJ
- http://bitcointalk.org/index.php?topic=109546.0 (Further discussion of the article)
- http://bitcointalk.org/index.php?topic=75883.0 (Mem’s List including Online Poker sites)
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A post on CalvinAyre.com, a popular online gaming news site, addresses Bitcoin’s growing role in the online gaming business. Excerpts:
“Because bitcoin transactions bypass traditional financial institutions, there’s less need for operators to collect reams of data from players. Indeed, many of the sites take undisguised pride in the fact that they require little more than a user name and an email address before letting a player wager.”
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“While some bitcoin gaming sites spell out in detail that they don’t accept players from certain countries, others don’t appear to care where a gambler might be located. That could bring them to the attention of US law enforcement, particularly those sites with .com domains.”
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“There’s no doubt that going forward, virtual currencies such as bitcoin will play an increasingly larger role in both the online gambling world and in the overall online economy, but for the moment, it’s still not quite ready for prime time.”
- http://bit.ly/O5NKey
- http://bitcointalk.org/index.php?topic=105663.0 (Further discussion of this article)
All News - Daily E-mail Subscription - Twitter: @BitcoinNews
Forbes.com contributor Jon Matonis (@JonMatonis) describes a bitcoin-related innovation that has the potential to bring disruptive change to the online gaming industry. The power of cryptography running from consumer-owned equipment makes it possible for the player to prove that the outcome of a wager was correct and fair. Excerpts:
“bitZino has boldly encroached upon an area that has been dominated by the third-party auditing associations. Lowering the barrier to entry, there is no more need for the auditing, certification, and standards organizations like eCOGRA (eCommerce and Online Gaming Regulation and Assurance) and APCW (Association of Players, Casinos, and Webmasters).”
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“BitZino claims their games aren’t just fair, they’re ‘provably fair’ and the verifiable proof is available directly to you as a player.”
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“I cannot imagine a gaming operator that doesn’t adopt provably fair systems to remain competitive in the future.”
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“Basically, bitZino is deploying a cryptographic hash function (SHA256 algorithm) to create a fingerprint of an already shuffled deck. Since the SHA256 hashing algorithm is one-way and there’s no way a player can use that hash to figure out what the shuffle of the deck actually is, the casino can let players look at the hash before the game starts.”
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“The second round of shuffling [using a client-generated seed value] only serves to ensure that neither the server nor client could possibly know the final deck before the game starts.”
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“Because the larger market doesn’t yet understand provably fair systems, it doesn’t yet demand them. So the big players aren’t likely to implement them. However, if history is any indication, the market will come around.”
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“bitZino currently offers single-player video poker and single-player blackjack that are provably fair. […] As I write this article, they have officially added provably fair roulette.”
- http://onforb.es/T3413g
- http://bitcointalk.org/index.php?topic=105180.0 (Further discussion of this article)
All News - Daily E-mail Subscription - Twitter: @BitcoinNews
Ars Technica writer Timothy B. Lee (@binarybits) checks in on Bitcoin on the one-year anniversary of the “Bitcoin Bubble”. Excerpts:
“But since it hit bottom late last year, the cryptocurrency has defied skeptics (including me) who predicted it would prove to be a passing fad.”
“Mobile Bitcoin apps for Android are now available. Unfortunately, [Gavin Andresen] said, “iOS has been a struggle just because Apple for whatever reason has decided they don’t like Bitcoin handling on their platform.”
“Future Bitcoin clients will support multisignature transactions, in which a user’s private key is split up among multiple devices. With this feature enabled, compromising any single device won’t allow an attacker to spend the Bitcoins in a user’s wallet.”
“[Jerry Brito argues] that Bitcoin’s relative anonymity and the lack of intermediaries gives it a crucial advantage for ‘illicit stuff: drugs, gambling, pornography, getting money out of countries where there are restrictions on moving funds. That’s where it’ll establish itself first.’”
“Regulations that tried to ban ‘transmitting numbers that represent some value over the Internet’ could hit startups that offer gift card trading or mobile check cashing. ‘It’s a real challenge for regulators who are working with laws that were written for atoms, not bits,’ [Gavin Andresen] said.”
“Disclosures: The author [Timothy B. Lee] owns some Bitcoins.”
- http://arstechnica.com/business/2012/06/porn-gambling-and-malware-bitcoin-as-the-nets-wild-west
A post on Bitcoin Money (@BitcoinMoney) blog points out the reason why Bitcoin’s transaction volume has gone stratospheric. Excerpts:
“While the daily transaction volume had been steadily growing at a casual pace since October, there’s been a development in the past weeks that has had a significant impact. The ten-day-old service SatoshiDice.com has been growing at a blistering pace.”
“There to be nearly four thousand blockchain transactions resulting from Satoshi Dice for the most recent 24-hour period.”
Satoshi Dice allows the Bitcoin wallet, whether it be the standard Bitcoin.org client or a hybrid Javascript-based browser wallet like My Wallet from Blockchain.info, to function as gaming terminal. What sets Satoshi Dice apart from most other Bitcoin-based online gaming services is the ability to play in an instant and to receive winnings back within seconds.”
“What may be occurring then is that Satoshi Dice is seeing some level of participation by those intending to alter the makeup of the coins held in their wallets. Satoshi Dice in its present form makes a poor solution for mixing however.”
Basketball fans should be all over this! BitMadness is offering a free-to-enter public pool for selecting winners in the NCAA College Basketball Tournament brackets leading up to and including the Final Four Tournament.
With a 100 BTC pot there is incentive to enter as this site was not promoted widely and there aren’t very many other entries yet. The selections must be made soon as games in the bracket begin on Thursday March 15th at noon (EDT).
Josh Strike, operator of the Bitcoin-only Strike Sapphire online casino (@StrikeSapphire), posted an article in Casino Meister. For the post, the operator opens the books — showing total drop, customer counts, deposits and the bottom line (a net loss). The service is not accessible by those in the U.S. due to online gaming regulations. Excerpts:
“I thought I’d share the results of my little experiment. Keep in mind this doesn’t include the external costs — I spent 3 years programming it on my own time, then about $7k before opening it, plus $15k in for the initial float, and I’ve dropped $8K on servers and other bills since it opened”.
“[The deposits per member metric has] a lot to do with Bitcoin’s instant deposits and withdrawals, and the fact that there’s no minimum deposit. Players can deposit as little as $0.05”.
“I just need to be able to take other payment methods, to reach a bigger audience”.
