Not too many people have probably heard of Bitcoin but I'm guessing within the next year or so you will, particularly if you play offshore. I have been following this new currency for a few months and have found it one of the most fascinating things to come around in a LONG time. Bitcoin or something similar to Bitcoin in the future has the potential to completely revolutionize the world economy much like the internet has done in the past 20 years. This could just be another flash in the pan but I am really starting to think it won’t be as there is a lot of angst around the world against government controlled currency with the 08 crash and the quantitative easing (currency manipulation) that has gone on since along with the Euro issues and Greece's basic insolvency. This could be the beginning of a revolution in world currency.
There is no way that I can adequately describe what Bitcoin is so I will post some links below but if you know what torrent is or what the original Napster was supposed to be it works on the same premise. It is a DECENTRALIZED currency that runs on the P2P network. No owns it, no one controls it, and nothing backs it up like gold. For those that want to do away with the FED banking system this may be the answer. If fact it has been mentioned in a senate hearing headed up by RenoChazz's favorite politician Ron Paul. Quite honestly I think governments are scared of something like this as there is very little they could do to control it.
It all sounds creepy and unsafe to be honest and I felt the same way before I got involved. There are actual reputable exchanges similar to the FOREX with the largest being the MtGOX exchange where millions of dollars are traded with various currency's. More and more companies are starting to accept BitCoin and regulators in Europe and the US are now allowing direct bank transfers to purchase and sell Bitcoins as it is SLOWLY starting to be treated as just another currency.
So.... how does this all relate to sports wagering? Well Bitcoin is 100% anonymous and if setup properly is completely untraceable. Basically you have a digital wallet that is setup on your phone or computer with lets say 100 Bitcoins which has an approximate value of $1,350. A second person had a wallet which could be the sportsbook. Your wallet and their wallet are only known by a unique identifier that is just a string of numbers and letters. No names are known and no identity's are relieved. When you send 100 BitCoins to the sportsbook it goes from your address to the sportsbook's address through the P2P network bypassing all banks and regulating agency's and the only thing that is known is the unique address of wallet A and wallet B. Again... no names, no email addresses, nothing. The sportsbook could then keep the BitCoins for paying out someone else or release them into an exchange like MtGOX and get other currency wired right to their bank. If you want to avoid banking all together there are sites like LocalBitCoins.com where people in your area will meet up and buy and sell them for cash.
Now... there are servers and computers all over the world that are supporting the network and of course they would not do this for free. When you send BTC (bitCoins) from one wallet to another you must include a fee of about 1 cent to complete the trade.
Here is the best part that I have found. Remember Matchbook? There is actually a site similar to Matchbook setup for just BitCoins called BTCSportsMatch.com. They are a sportsbook that matches sides based on Pinny no vig lines. That's right... NO VIG. The winner of the bet pays a 1% fee when the wager is decided. The problem with this site is it is still in it's infancy so there is not a lot of people using it yet but for the major games I have found no problem getting my orders matched.
All of this is 100% legal. By using Bitcoin you are not breaking a single US law. As long as people pay there taxes there is nothing wrong with moving money around like this.
So whats the problem? Sounds great right? Well it's not perfect....
To get setup using Bitcoin is not the easiest thing although every month there seems to be a new product come along that makes it easier and easier. Even though it has been around for 4 years now it is still in it's infancy and some of the things you have to know and do are quite techie. It is no where near ready for the mainstream but there are a lot of startups working on making it point and click. Eventually it will become quite easy to use.
If you look at the MtGOX charts of the value it can swing quite wildly. It has been as high as $30 and as low as $2. It takes months to do this but it is not like holding onto an american dollar. If one wanted to simply use it as a vehicle to move money you would want to get in and out of it within a few days as you could lose value just by sitting on it... but you could also make money. Currently there is only 10.5 million Bitcoins in the world with a increase to 21 million in a hundred years or so. There will never be any more so if this where to catch on the value of each BitCoin would be astronomical. For this reason you can trade down to 8 decimal places of a single coin so actually Trillions of smaller pieces.
Theft and security is always a concern and there has been a few issues with this but it was more to do with people being stupid with their digital wallets and companies leaving un-encrypted hard drives laying around. As long as you are not moving your entire bankroll or life savings around around and you are very safe with you wallet you will be fine. Theft and security is just as much an issue with fiat currency as well.
The bottom line is as the UIGA continues to strangle the money flow to and from books and the US govt seems hell bent against internet gambling the books and their clients will have to get more and more creative with their funding options. BitCoin seems to be the answer. Anonymous, virtually untraceable, and not illegal. Additionally if BitCoin or something similar where to take off it sure would be nice to have 100-200 of these coins when prices shoot through the roof.
Does anyone have any experiences with BitCoin? I would like to know what others think and what the computer genius Patrick has to say about it.
BitCoin sports wagering links:
There is no doubt the governments of the world will find a way to regulate and tax it if it where to grab hold. They could easily regulate the exchanges like MtGOX and any other FOREX type exchanges that where to come along. Beyond that I really wonder what they could do. There was an FBI paper that was released this spring that shows they are quite concerned about it. Their aspect was more criminally related then taxes as this new currency I guess is used quite extensively for drug deals, weapons, and other unsavory stuff. I really don't see any way the government could completely shut it down. Millions of dollars of movies, music, software illegally change hands every day on torrent and there is virtually nothing any company or government has done or can do about it and most likely never will be able to do other then shaming people out of it. It is 100% legal for people to create and use other currency's in this country, many have tried and no one has succeeded.
I just cant believe the there are not at least a few offshores that have not tried this out yet. It's getting easier by the day.
Great Post Parker,
I'd give it two thumbs up if I could
Thanks Reno. It really is the future. 500 years ago gold and silver where to main currency around the world. The pieces where worth what people where willing to give for them at the time. Nothing more & nothing less. Governments could try to manipulate the value of gold by hording or flooding the market but there is a finite amount of gold in the world so they couldn't overdo it. Today there is so much currency manipulation and it is not backed by anything other then the faith of the government. I certainly wouldn't expect anything like this to take the dollars place for a VERY long time if ever but there is no reason we couldn't have a one world currency controlled by no one along side what we have now. In a nutshell we do have a one world currency called gold but you cant scan a piece of gold and send it to someone in Germany in less then a minute.
Reno as you eluded to the system is very nerdy right now and not setup for everyone. The basic network is in place just like the internet was in the 70's & 80's. What we need is our "Netscape Navigator" to come along with a pretty GUI and this thing could go nuts. Just in the past few months there are sites like BitInstant.com coming along where you can now go to any Bank Of America or Walmart, give them cash and have Bitcoins in your account in less then a minute. Just yesterday I met a guy at a Starbucks through localbitcoins.com, gave him $300, he scanned a QR code on my phone and instantly I had 21 bitcoins. I immediately sent them to BTCSportsmatch and was betting games within 5 minutes with no vig and it cost me a total of 2 cents in transfer fees. I could just as easy withdraw and send them to my bank account or meet up with someone else looking to buy and get cash in hand. Just like Netteller in the good ole days.
I just wish places like 5dimes would start taking it.
I also think this has huge potential for local bookies. You no longer have to meet up with people just send the BTC to their wallet.
Excellent post Parker. I was pointed here by someone on BTCSportsMatch.com. I have been playing there for months and it's great. Bitcoin is the best kept secret in the business. But probably not for long, the links you listed show a lot more press coverage recently. I have no problem getting 100-500 USD equivalent amounts per game matched on BTCSportsMatch.com - mostly on football, but there is decent action on NBA and NCAA hoops as well. Best odds on the planet (true vig-free auto updated, winner pays only 1% on won amounts only).
There is no doubt bitcoin, or something like it, is the future. As Parker mentioned, it's like the old Neteller days but BETTER - because you don't need NETELER as a central entity. It's all peer to peer like bitorrent.
It'll need the exchange rate against the $ to stabilise for an extended time - a lot of books will have been spooked by the insane volatility.
Once that happens, it's almost ideal. No reversing of transactions and entirely automated, makes it very cheap to handle.
It will slowly start to stabilize as the volume increases. Right now you could dump 100K of BTC on the market and drop the price 10%. Once there is more volume to absorb larger transactions the swings wont be as wild.
If a book really wanted to do this right now, and other then the volatility I have no idea why they wouldn't, they could easily setup an account at the MtGOX and exchange their BTC every day... or even every hour to a more stable currency and avoid the swings.
The UIGA was designed to SLOWLY starve the offshore gambling industry and for the most part it has been a success. It's next to impossible to use a credit card anymore and with HSBC being fined over a billion dollars for money laundering in Mexico this past month I see that door being completely shut in the next year. No bank or credit card company will risk fines like that. What is left? P2P? You really don't think big brother knows and is watching those? There is no reason they cant start cracking down on those as well.
@RobW2 BTCMatch is amazing to me. It has so much potential. Right now I am just mirroring my wagers on there for 1-2 BTC to get a feel for things. So far I have been able to match every wager so it has worked out well for the smaller amounts.
Bitcoin is one of the single greatest revolutionary concepts in... ever. Though unlikely to ever amount to much, it might be prudent to buy one bitcoin just in case.
The major feature of this system is that it's decentralized. You do not live in a free country if your medium of exchange is regulated by a central authority (the government). If bitcoins were accepted as a means of exchange then we would be an incredibly more free people, liberated from the unconstitutional restraints applied on us by our government and, ultimately, banks. Its finite distribution means you never have to worry about your arsenal being devalued due to deflation; governments can not simply create more bitcoins to free themselves from their own messes.
The likelihood of its adoption, however, is quite small in my opinion for a number of reasons. For something like this to work it would need a critical mass of people willing to invest their "real" money for bitcoins. There are some changes that need to take place before such a critical mass could be possible.
Bitcoin, at least in its current state, is not the easiest concept to grasp. I'm a pretty nerdy guy, and it took me quite some time to understand how it all works. Further, the whole concept of purchasing, transferring, and keeping secure a virtual wallet containing bitcoin encryption hashes sounds understandably daunting for your Average Joe. That said, there is nothing stopping the creation of a PayPal-equivalent that provides an easy front-end interface for the system.
The concept of the shift in power may be too much to handle for some people and/or businesses. If it became the main currency of the world, its early adopters would be equivalent to modern trillionaires, while folks like Mark Zuckerburg, if not early adopters, would turn into middle-class citizens. Of course in Mr. Zuckerburg's case this would be instantly offset by the real value of his existing business, but it would greatly reduce the significance of past financial gain. Additionally, I imagine it would only further the disparity between wealthy and poor, though to be fair it would likely increase total global wealth in the long term once full adoption has taken place.
It may put large corporations in a spot where they fight to their death against the change. If Walmart were to skip out on early adoption, then it may be forced to forego middle adoption as well as its only chance to remain a powerhouse would be for the Bitcoin system to fail. Even if such holdouts were ineffective, it would undoubtedly destroy some of the modern conveniences we've grown accustomed to in American culture. For whatever reason people have this bizarre sense of national pride, so the threat to American dominance may dissuade adoption. Same goes for the other relative powerhouses of the world.
I saw a slogan on a guys car that said "Proud to be an American" and I thought "What the fuck does that mean?" I'm fully Irish, and when I was a kid I would go to the St Patrick's Day parade and they sold a button that said "Proud to be Irish", but I knew that on Columbus day they sold the same button only it said "Proud to be Italian", then came Black Pride, and Puerto Rican Pride. And I could never understand national or ethnic pride, because to me Pride should be reserved for something you achieve on your own. Being Irish isn't a skill, it's a fucking genetic accident. You wouldn't be proud to be 5'11". You wouldn't be proud to have a pre-disposition for colon cancer. -George Carlin
I find it extremely unlikely that the US government, or any other "free" government of marginal dominance will allow Bitcoin to naturally flourish. Therefore, in order for Bitcoin to become anything of significance I believe the movement will have to start in countries where monetary regulation is not as strong. No matter how much the US government were to fight its adoption, it would be left with no choice if the rest of the world was using this "currency" thus destroying the relative value of the dollar.
Over all this will fail eventualy.
If it gets big enough, goverements will find a way to regulate it.
there's a bunch of legislation about gov having more control. Big UN meeting just recently.
And ways to tax internet transactions.
Right now it's too small for a gov to bother with, if it gets widely accepted they will step in.
I could be a snob and argue that nothing in the world has any value beyond that value which is perceived, but even I know that that wouldn't exactly be a fair argument (plus I like you) so I'll try to be more reasonable. I think, being reasonable, that you could look at what has utility value and what does not. eg, a diamond has significant utility value because of its cutting abilities, but its trading price is much higher due to perceived value created by jealous women and proud men.
To the best of my knowledge the USD has little more utility value than does the BTC. It does not have any backing beyond "The Full Faith and Credit of the United States Government" which sounds great but doesn't have a whole lot of meaning. If the relative value of the dollar were to drop from $1.00 to $0.30, then the value of its governmental backing also drops from $1.00 to $.30, making said backing essentially worthless. The dollar has already lost over 96% of its purchasing power since inception, and will only continue to do so, even if purportedly be design.
Even when the USD was backed by gold, that backing was insignificant as the overwhelming majority of gold's value is also perceived.
All that said, I agree that it will probably fail miserably and go to zero within a few years. But I think it will fail due to corrupt interference rather than internal misconfigurations.
As a post disclaimer, I should mention that I don't have a whole lot of clue about that which I am talking. This is merely the way I interpreted BTC vs USD, and there could easily be loopholes in my argument.
But I won't say it's 100% certain to fail, just highly likely.
The way this would work is if it turned into a massive, worldwide anti-government movement. The next civilian uprising, and it's bound to happen at some point just based on historical analysis, will not and cannot involve the use of military arms.
Are we ready for such an uprising? No. Even though there are maybe as many as millions of us who think critically and understand how life really works, if you step away from your computer for a few seconds you'll see hundreds of millions who don't; you see tons of folks who think you're some conspiracy theory whacko because you don't worship your government like the second coming of Jesus Christ himself; you see people who reference dialogue on NBC as absolute truth. It's hard to imagine such a large-scale revolution with so little of the public involved. And while the advancements of the Internet have vastly multiplied the spread of this awareness, it still has a very large way to go.
In order for an uprising to occur, it must receive a critical mass of people willing to participate. The spread of information required to gain this critical mass will surely be done through the Internet, so it requires cooperation from the ISPs of the world -- cooperation that I find unlikely to come unless it were to make those ISPs even more wealthy.
If Bitcoin were to grow large in the US anytime soon it would be crushed, because the government is ready to crush it and the citizens are okay with the government doing whatever it wants. Like I said in my first post about this matter, I believe that the movement must start elsewhere -- somewhere with less ability for monetary regulation and for Internet regulation. It must become a widely-accepted local currency in a number of smaller regions, and it must stabilize to a degree. It must grow the same way that a popular website like Facebook grows, by starting locally and then slowly spreading. The unfortunate thing - if you want to call it unfortunate - with this (relatively) likely scenario is that it would lead to a worldwide shift in economic significance, seeing countries like America, UK, France, etc becoming less relevant.
I think it's a mistake to thing there are only two outcomes: bitcoin taking over the world or bitcoin going to 0. There is a huge niche for grey market transactions and other use casess: where people wish to remain anonymous, simple tax evasion, or remittances to other counties for pennies rather than WU fees. The size of these markets are enormous but falls way short of Bitcoin replacing the USD or EUR, which is of course absurd.
Given the technical complexity and other hurdles for the general public to get into Bitcoin, I think it very likely that Bitcoin will be wildly successful as a niche currency - relatively unknown to Joe Public, but stepping into the obvious need of the grey market. Compared to 4 years ago when Bitcoin was just a Whitepaper, it already is a wild success - look at the size of the network, the number of people and merchants who accept them (WordPress sees the power of bitcoin - http://en.blog.wordpress.com/2012/11/15/pay-another-way-bitcoin/ no 3rd party to tell them who they can and cannot accept money from). The huge niche - yet not taking over the world is a very possible outcome.
Gold is the defacto standard world currency and has been for 1000's of years. Yet it's true value is it's industrial use as a high quality conductor of electricity and a few other minor things. The argument that cryptocurrencys have have no true value is a common one. I would agree that this has a 99% chance to fall flat on it's face but I think that this could be the dawn of some pretty revolutionary things in currency.
Let's say this or something like it started to take off and gain significance in the next 10 years. What do you think governments could do to control and regulate it? I don't know enough about computers and how p2p works to understand it. As it is creating and using secondary currency's in the US is not illegal could be fairly difficult for them to change that law. There have been millions, if not billions poured into trying to stop p2p and torrent type networks with very little success. The government could slap a prohibition on it and just flat out say it is illegal, company's cant accept it and citizens cannot use it but we all know how well things like that go over... alcohol, drugs, guns, gambling, etc. When illegal all of these things are still readily available you just have to look a little harder. If something like this was technologically sustainable all that would do is push it's use underground for gambling and drugs.
If the government waits too long they could have a hell of a fight on their hands. Just this past year with the Stop Online Piracy Act congress tried to ram down our throats we saw an awesome display of unity of the internet world. Lawmakers went scrambling like roaches when it finally came up for a vote. People in the US don't like when the government messes with their internet, it's the one last relativity free thing we have left in the world.
Agreed, there are more than two options. But those two options are the most fun to speculate about! 99% chance of failure, 0.999% chance of sustained grey area success, 0.001% chance of world domination.
I don't know that the government could actually stop it at its core, but they could disrupt it so much that its adoption never takes place. They could forbid businesses from accepting it, and they could make it outright illegal to own. Although neither of these things would necessarily stop its spread, you have to keep in mind that the vast majority of citizens, at least currently, do not want to oppose their government.
Which again is why I think that the movement would have to start elsewhere such that the American government is forced into thinking "well fuck, the USD is going to shit because of this new currency and we have no choice but to legalize it if we are to remain even marginally relevant."
For the short term though I think this is good news for the offshore industry. This quote from a Forbes magazine article caught my eye:
"Initially, processing will be managed by payment service provider BitPay, Inc. of Orlando, Florida. BitPay shields WordPress from having to handle actual payments by immediately converting and transferring sales proceeds into a WordPress merchant bank account. This minimizes the currency risk for the accepting merchant. An important configurable option also allows the merchant to retain Bitcoin balances for their own account and subsequent usage."
A "possessing" company similar to bitpay.com which could be located in Costa Rica and would handle all of the transactions for the books down there. Because the industry is legal in CR they could instantly convert the BTC to local currency and transfer the deposit to the books local bank account. This way the books don't have to get involved with converting and currency fluctuations.
The problem is that there is exactly nothing holding up the value of bitcoin.
- True, but such is the case for many if not most other currencies. To a certain extent, perception is reality, so perceived value is all you need. That's exactly how the USD works.
It's a random dot-com. When it goes bankrupt (it will), so will the value of bitcoin.
- No. It's not a .com. Although plenty of websites exist which reference it, none control it. It is like a virus: once spread, you cannot kill it by killing the original source. Of course it could dwindle down to less than $0.01/coin but it would never completely die. The only way for this virus to die is by sheer apathy by those infected.
This is the fundamental flaw of the idea of an alternative currency: what happens when the issuer goes under?
- It has no issuer, and that's the whole point. If it had an issuer then that issuer could devalue the currency at any point by creating new coins. Instead, there are a finite amount of coins that cannot be altered, and there is no source which has power over any happenings.
Sure the US govt. could go under, but the odds are infinitesimally smaller of this occurring than some random startup going under (happens every day).
- It's not a startup. It's a P2P network whose creators have no vested interest in its success aside from the coins that they own (which is quite substantial, but technically different). There are no owners of Bitcoin, it cannot be sold, it cannot go bankrupt, etc.
Bitcoin is like a junk bond that pays you zero interest for the risk you have to endure. I would have no sympathy for anyone who loses even a single dollar in this.
- Fair enough. If I were to invest and lose, I certainly wouldn't be seeking sympathy, nor should any investor on any investment. The coolest part of Bitcoin to me, and perhaps the main reason why it won't work, is that it holds you accountable for your own decisions, starting with the decision to buy your first bitcoin. If I were to invest personally, it would be more of a cautionary investment, purchasing a few coins just in case. After all, if it were to dominate the world then the most expensive house in the world may cost less than 1 bitcoin.
Currently the value of Bitcoin and any potential cryptocurrency in the future is in it's ability to circumvent standard channels of money. Essentially what I am saying is that right now this gives people a way to buy drugs on the internet, fund wikileaks, gamble online, write a blog in Iran anonymously, including many less scrupulous thinks like fund Al-Qaeda. ALL of these things, whether we like it or not have gone on and and will go on no matter how many Patriot Acts and UIGA's the government signs into law. Something like BitCoin makes doing all these things much easier. There is a HUGE market for direct customer to customer payments without having to go through filters of a currency system not designed for the internet age and most of these needs are not of the "dark" kind that I mention above. If I am looking to donate to some charity in Africa why should I have Visa take 3% off of the donation along with who knows how many other skimmers along the way? If I am a farmer in Finland and I want to send a truck to pickup a load of hay how should I pay? Check?.... hope it doesn't bounce and wait up to 7 days for it to clear?... Cash?... that is about the most dangerous way... Visa, Paypal, etc?... why should they get 3% and wait 24 hours for the money to be deposited in my account? Or he could send something like BitCoins through his cell phone and the seller would have money in his account within 5 minutes with computers all across the world confirming that this transaction is legit? It's a no brainer for me.
Providing the technology is sound and unable to be hacked the "problem" then becomes two fold...
- The government could try it's ass off to stop it but that will not stop it in Columbia, Iraq, Afghanistan, Kenya, and 100 other country's who's currency is shit and who could actually benefit from something like this. The more the big 20 governments would try to stop it the more value it would create for it. By then of coarse there is no chance of it going main stream but we are all just a VPN and TOR network away from using it inside the US.
- The government could just turn a blind eye to it and hope, pray, and plan that it will die on it's own. If it doesn't though it will create a system so large that by the time the government tried to do something it would be too late. Had the government tried to enact the "Stop Online Piracy Act" back in 1994 when only nerds knew what the internet was they would have had no problem but instead they waited till 2012 and it blew up in their face.
"True, but such is the case for many if not most other currencies. To a certain extent, perception is reality, so perceived value is all you need. That's exactly how the USD works."
The thing is....a currency's value is based on trust. The idea that the level of trust involved with a random, unregulated entity (or even worse, a lack thereof) is anywhere near that of an established government is a pretty ridiculous reach. If bitcoin goes to zero (people refuse to pay for it with actual currency or goods), no one bats an eyelash. It wouldn't even make an AP news story. It simply ends when the music stops and all the bagholders lose money. If the U.S. dollar heads to zero, the entire world would be trying to prevent it. It would be the biggest event in modern history. Could it happen? Sure. But it's not at all likely to occur in our lifetimes.
So one dollar of US currency and one dollar's worth of bitcoin (or any other unregulated faux currency) are not at all comparable, regardless of what the prevailing "exchange rate" is. If I could, I would bet heavily that bitcoin will be worthless in 10 years. I cannot, so I am left to make posts to point out that the idea that random strangers trusting each other over large sums of money without a centralized entity regulating it...is simply a bad idea waiting to implode.
"The thing is....a currency's value is based on trust."
No argument here. And that's why the BTC is practically worthless compared to the USD (relative to amount in circulation), and that's why BTC will probably never gain a real following, and that's why BTC will probably fail miserably once its holders get scared, etc. But I still say, at least theoretically, that it's plausible that the BTC becomes trusted more so than the USD and therefore becomes more powerful than the USD. And then there's the more realistic possibility that it continues to serve a niche such as Robw2 pointed out.
@evo34 Bitcoin is not a "dot-com", nor is there any "issuer." That's what makes it so special. There is no company to fail. It is a distributed protocol system, with no central server, office, or authority.
It's true that nothing "backs" Bitcoin, but nothing "backs" gold either. Both are useful resources, and they are scarce, and thus they command a price on the market. If the usefulness falls, or the scarcity falls, of either commodity (bitcoin or gold), its value will fall as well. Both Bitcoin and gold are excellent monies, and that is why they command their price. It's true that gold can also be used in jewelry, etc., but that is a very small fraction of its value, and if it was not used as money the price of gold would fall precipitously. Bitcoin is far more speculative, and uncertain, than gold, but they are both valuable commodities and indeed both far superior to fiat currencies.
@ evo34 - It is a very useful resource. It is the first fully distributed timestamping service with a public ledger. There are thousands of nodes. Bitcoins are just a unit of account in that system - the real value is in the network. Being able to send a unit of account from anywhere to anywhere, with no thrid-party middleman bank, govt, or entity - THAT is the value.
The value to the sender is sending a payment to a guy across the street or around the world for essentially no fee - and without providing ID/Credit Card details that may subject you to identity fraud in the future. Also there is no middleman to decide if your payment is 'acceptable' (Want to donate to Wikileaks? Too bad, Paypal and others cut them off).
The value to the merchant or acceptor is even stronger - No chargebacks are possible. No fraudulent orders. No middleman (Visa, etc) to take 3%. No middleman to block you (Paypal, Banks, Sanction Lists).
So sure, it is easy to say "lol, it's not backed by anything, it's a joke" - but the backing is in the robust p2p global network that provides the advantages listed above. That doesn't guarantee a certain USD or EUR price of course, but to say it's not useful is completely ridiculous. Anyone who has tried to fund an offshore book, or had to pay huge fees sending money somewhere, or been blocked/delayed in any way by a bank/provider/payment network can certainly see the value.
Robw2 -- "a robust p2p global network" is not "backing", nor is it a "resource" in the sense the first poster claimed. Backing is guaranteeing; it has nothing to do with quality of pipes for transferring currency. A technical network guarantees nothing. Banks and governments offer guarantees. Ones that aren't infallible, but nevertheless are very likely to be honored. There are so many things that can go wrong with bitcoin, and if/when they happen, no one will care. There will not even be any lawsuits, because there won't anyone to sue. Just people complaining on forums about how much money they lost. Sure, 50 years from now, there may emerge a universal electronic currency that has gained enough traction to be trusted around the world. Unlikely, but certainly possible. But why would you want to get in so early when the risk of failure is so high? To me, it's a sign of how desperate and risk-unaware US sports bettors are. I'm well aware of the hassles and limitations of dealing with banks, but for now it remains the only real option that doesn't require taking an absurd amount of risk.
My timing is terrible... i started buying them at around $13-14, where they'd been for months.
They've spiked in the couple weeks since then to almost $20.
Anyways, come take me on at BTCSportsMatch guys :) Also been looking into Anonibet, but the lines aren't great.
I bought around 30 at $13 as well through localbitcoins.com and I would like to get more but the volatility is too nuts right now. Once sports books start using this (and they will) I think the price will stabilize a little more and most likely increase steadily. These exchanges really need to start to allow users to short the currency to bring some downside protection and stability.
I use BTCsportsmatch everyday. I LOVE it. BTCSportsmatch brings your break even point down to under 51% which is unheard of. For right now I only mirror my wagers with 1 BTC but as soon as I get more I plan on raising it.
I do have a HUGE problem that you cannot limit your price on BTCSportsmatch. It's not cool that I place an order and log on an hour later to find out it was matched but at a worse price. Come on guys, get it together. I have heard rumors that they plan on implementing a limit or choice in price feature but nothing yet
FYI I believe Anonibet is a parimutuel book so make sure that's what you want.
I really think the future could be some sort of P2P open source betting system similar to the way Bitcoin is set up. A client is installed on a players computer which would download a public ledger and keep track of all the wagers around the world. Each client or player would would be assigned a public address or key similar to Bitcoin. Bets can be made anonymously similar to BTCSportsmatch or Matchbook where you would put your requested bet out on the P2P network, once someone accepts and it is matched the BTC's are locked on the network and the winner of the wager would receive the key to unlock BTC's and transferred to their account. Obviously this would be done with no vig.
This is clearly a rough sketch in my head as I don't know much about computers but with the advanced cryptography in Bitcoins I would have to think some way and some how this could be built open source.
Parker... Great article.
Taken any money off me on BTC yet? Can you clarify how that might make Anonibet different from other books? Thanks buddy
I am pretty sure that Anonibet is a parimutual book meaning it's not fixed odds. Similar to horse racing or dog tracks. I believe your payout and odds are not final until all the money are in and the vig is taken out. I could be wrong though.
Not sure if I have won off you but I have been doing fairly well on there though. I am going to up my play a little as I found Bitme.com yesterday and was able to buy some Bitcoins for only a 0.75% fee which is a steal compared to what some of the people on localbitcoins charge. I was able to move $500 over there in about 5 minutes... that would have taken me 2 hours, a trip to Western Union, a long form to fill out, strange looks, and two phone calls at any other book.
Streets - not enough liquidity or functionality to do that yet. Do locals do this much outside the US already with pinny / exchanges? I'm sure it could be similar in the future.
Anyone else watching this price spike? https://coinbase.com/charts I'm scare to "reload" and then see it cut in half in 3 days.
Based on previous patterns, my guess is it's going to pullback before it hits $35-38, and settle somewhere around $25 for the time being. This seems to be bitcoins way of "breaking out" of the previous trading range.
Who knows how high it could go this year, though.
Bitcoin is going crazy. I started this post on 12/28 and the price was at $15.40 and today it is at $43.36 and shows no signs of slowing down. Quite honestly it is scary and I am ready for the bubble to pop at any moment but I am in this for the long haul... sink or swim. Every day there is a ton of new developments. Major players, venture capitol groups, even reports that traders at Morgan Stanley have been trading Bitcoin. Who knows where this thing is headed but it is one of the most interesting things to watch in a LONG time. Had you taken $1000 and purchased BTC on 12/28 you would now have over $2,800. Unbelievable.
Parker , unbelievable !
dont you think it is time to sell ?
(i bought some after you brought it to our attention) for around 18
Yeah there has been A LOT of press about Bitcoin lately. It is shooting through the moon right now at over $70.00
The Cyprus government has taken (stolen) 20% of people's savings out of their banks in a last ditch attempt to save their monetary system. REALLY scary stuff if you ask me that any government can just decide one weekend that they want to flat out take 20% of your money. Right now all the banks have been closed and the most you can get out of an ATM is $100 a day to live by. Just one more reason to not trust government backed fiat... along with the 85 billion Bernanke is essentially "printing" every every month. Our dollar will be worth nothing if they keep it up.
There are talks of the government in Spain and Italy taking a percentage of peoples savings as well which has them fleeing to anything they can. Bitcoin happens to be one of the places. There was an article that searches for Bitcoin in Spain is up something like 10,000% in the last week. The Spaniards and Italians can still try to save themselves... unfortunately the Cyprus banks are frozen and those people are screwed.
I know I have made a TON on Bitcoin since I started this thread but unfortunately the gains are not realized until I sell it. No clue when to do that but with the some of the European countries circling the toilet I see Bitcoin going way up from here. People are just plain tired of government manipulating there currency's and are slowly finding out that it directly affects their lives.
Yeah IMO Silkroad and Tor do more damage to Bitcoin then anything.
The Treasury Department released guidelines for ecurrencys last week acknowledging there existence and establishing regulations. Basically they want the exchanges to be registered and comply with the paperwork for money laundering. It's good and bad but for now it seems that they will not have a problem with Bitcoin and allow it to progress as long as the exchanges follow the banking rules.
It already has. You can get bitcoin gift cards at Walmart now, and buy nearly anything from electronics, to books. I think Canada even has bitcoin ATMS. With the issues going on in Cyprus bitcoin has nearly doubled overnight.
It's gaining a lot of creditably. IMO It will by no means ever replace traditional currency's but it sure could stand aside current fiat. I think of it as gold or silver.... More of another deflationary means of storage that happens to be VERY easy to send an receive. If the technology can hold up... that's a BIG if, there is no reason this couldn't be one more place to park $$$ to offset dumb government fiscal policy's. Even when/if it fails a lot will be learned and carried over to the next try. Most likely something like version 5.0 of this technology would revolutionize money in the same way computers, internet, email, etc. have permanently changed the way we live. Think about it.... this is the first time EVER in the history of the world where we have a currency that is controlled by virtually no one. It's value is set by true supply and demand. The only thing that has ever been close is gold and there LONG history of governments manipulating gold.
Again, IMO Bitcoin most likely has a 0.1% chance of being the long term future. I consider it the beta version but the groundwork has been laid and the gears are in motion and it is very exciting when you really think of the potential. This very well could be the beginning of complete revolution in currency. Considering we are working off a system that has changed very little in the last 100 years I say it's about time.
I enjoy this thread, it got me thinking a bit.
It appears the potential value proposition here is a limited currency that is almost as good as someones word, provided there are enough backers of said "word".
Follow me through this and help me out where I am shortsighted. Bitcoin will max out at 21 million "Bitcoins", likely around the year 2040. Regardless of how much the currency is actually worth, here's how I see it:
Let's say Bitcoin stabilizes at fifty cents per Bitcoin (totally made up number for the sake of dialogue and context - I'm not in finance or trading - I'm throwing out a realistic figure per the way I see the real value in the concept). That would mean that the value of the entire system is 10.5 million (That's 10.5 million US dollars for right now but it will likely acquiesce to a metric that is created by a group of heavy hitters that control the underbelly of many large underground operations. To understand this concept google "The Creature From Jekyll Island". Absorb as much as you can or would like to. It's a detailed, accurate analysis of how the Federal Reserve came to be).
Isn't there some value in a system like this on the black market, or underground markets (sports wagering, alcohol, and more/most salient, drugs) for people who need to make swift transactions in a discreet fashion? The premise of what I'm stating is that the people who would back up the currency are likely large scale drug dealers and mob style entities. Bitcoin could almost be backed or semi "owned" by people who are willing to accept the currency whenever it's presented.
Let's say Michael has a drug operation in a small town. Things are corrupt and the town is struggling. Cheap cell phones are close to everywhere and it's easy to put the Bitcoin app on there. If Michael controls the bodegas, the drug supply, the alcohol and a few other entities (prostitution and gambling), wouldn't there be a market for something as seamless as Bitcoin? It would be nearly impossible to prosecute if the transaction weren't traceable. Think of all the zealots and nut jobs in organized religion these days. Or just regular nuts like us. Wouldn't they/we love this type of privacy?
The price of the currency then fluctuates relative to how many people are willing to not just accept it, but back it. The white hot drug trade in Mexico I assume would have players that are more than willing to stand up for the currency, which is in essence someones "word". Someone's "word" who knows someone who is willing to back it, regardless of geographic location. Hmmm...how about a town like Miami? Moscow, Rio, Cheng Mai, Philadelphia, Anchorage, NYC? People who like heavy drugs, gambling, sex and alcohol now have a way to sweep their discretions under the rug after embracing a small learning curve (cell phone app).
Don't fool yourself. Should another "depression" arrive the things that (not surprisingly) do well are drugs and alcohol. Shame and hopelessness go together like cocaine and whiskey.
The way I look at it, a private currency has been created that has a value for the aggregators of lifes more charming sins. Bookies, Pimps, Bootleggers and Drug Cartels. Looking at it simply from that perspective, isn't that one way that Bitcoin provides an immense (albeit ever fluctuating) solution?
Let's say there are 20 major drug markets in the world (totally random number - again for the sake of context and dialogue). Each market sends a rep to a "meeting" (insert Creature from Jekyll Island by Edward Griffin) that states that all members will back Bitcoin per their interests in local communities (bread, whores, etc...) and each member will contribute 5 million dollars to seed the "startup". 5 million is nothing for these people. But what they then have is a way to combat/rival entities that control traditional capitol that has been failing.
The thing to remember is two dovetailing value propositions.
1) Satoshi Nakamoto created something that even elite coders consider to be state of the art. Even beyond that. It's considered flawless because it "expires" rather than increases. If you occasionally eat paint chips for breakfast read that again. It means that there is no one PRINTING MONEY THAT HAS NO VALUE.
2) Per the bulk of this response. The people like Michael have a way to move in the shadows. Insulated from their "customers" the way all tiered drug organizations are run, yet the Bitcoin winds up in their virtual wallet. At the next meeting, they cash in their Biticoin to one of the other heavy players and the cycle continues.
Shoot this addition to the conversation down boys and girls. It seems too lucid to be wrong. Am I getting +110 and there's an injury the coach hasn't reported?
I guess there is more use to this thing then gambling and drugs!
Now if only 5Dimes would accept it.....
Bitcoin was not hacked. I didnt read that article Clarke but I can assure you Bitcoin is alive and well. The underlying structure of Bitcoin (the Blockchain) is incredibly safe. With the computing power we have today and probably for the next 50 years it is virtually impossible to hack. The problem is the front end GUI's, wallets, exchanges, processors that can be very unsafe. They are simply as safe as any other website you come across... some are good and some are bad. The biggest problem is the tech is very hard to understand so every media talking head thinks they know and produces articles and segments like what you linked to. It also doesn't help that the price has gone through the roof and everyone is waiting for the "bubble" to pop... it would make for great "told you so" articles.
To put it in fiat/dollar terms, a bank got robbed and some people lost money because they trusted that bank was safe... and it wasn't. The money supply and structure is still as solid as it ever was but that bank went out of business.
This will NOT be the last time as it is a virtual gold rush right now to develop websites and applications on top of the Bitcoin network. A lot of great things are happening but people are going to get hurt by putting there trust where they shouldn't.
Control of Bitcoin
There really wasn't an attack. Lots of denial of service attacks and stuff like that is going on. Wallets have gotten robbed because people don't follow proper password techniques but the underlying structure of Bitcoin is unbelievably solid.
And yes... millionaires are being made every day. Since the ledger is public you can see the addresses with the most coins in them and there are plenty of millionaires. The hedge funds and venture capitalists are starting to take notice that there may be something to this... things are about to get crazy. This has all the potential to be something revolutionary... and I don't mean Bitcoin per se but the tech behind it.
Maybe there already is a sportsbook that accepts bitcoin...found this link on the SBR Forums...don't know if it is a legit sportsbook or not...never heard of them!
Also here is the link to the SBR forum where they mention this book...
Definitely not a major sportsbook if it is one at all...but worth a look at least...
Yes, Parker and I have been using BTC Sports Match.
They have a sportsbook as well. It's been a black hole for me and personally I prefer Anonibet. No waiting for someone to match your bets or moving lines. Daily payouts. I was up to 60 BTC on BTCSportsMatch and lost it all - back when it was worth like $15!
Luckily been doing well on Anonibet. Still, I can't help but imagine if I"d been more careful with the 60 BTC :)
I was accumulating a steady position - 5-10 BTC a week - when it popped.
If this had been two months later, I'd have had at least 100+ easy.
Yes Pitch there is some BTC sportsbooks but nothing like that big ones we all know of. I would just think with all the money moving problems that have crept up on the books in the last 5 years they would be all over this new method. Providing the market stays liquid and the price somewhat stabilizes I think by the end of the year there will be at least one major book accepting Bitcoin... Hopefully.
For those who don't know, the bitcoin bubble popped yesterday to some extent.
As someone who knew this was coming any hour, and has seen it a dozen times, I should have been better prepared. I spent yesterday morning talking to a friend about how could I be able to sell at $220 and not miss it? Was worried it would crash while asleep. Go to lunch for an hour, and its down 50%!
Now I know.... I SHOULD have had "bitcoin ticker widget" that can update 1x per minute and "Bitcoinium" on my phone to track charts and market depth live!
And, should have had an account on MT.Gox or a major exchange, with my coins ready to sell.
Coinbase was NOT able to handle the fluctuation & offered a joke of a buy/sell spread.
These are just some tips if your're involved or on the sidelines. If you don't have market/stock experience, or have a weak stomach, I'd stay away for now. Bitcoins prices are changing ridiculously fast and who knows how low they could go.
Luckily it rebounded, and I sold some of my coins at ~$185. Right now, it's back down to $115 and the market is currently suspended to cooldown until 9 pm CST.
The markets been trading since the crash in a very tight range of about $115 to $195. There is quite a lot of support around $100-110, but if we see it break through that level, it could certainly have a downward breakout. I would watch closely to see what direction the market decides to go. I would value them no lower than $50, and will buy in if they happen to get around there some more.
Evo, great article.
It very important to know bitcoins are obviously in a "bubble" and will crash again. I disagree with the article, that you may lose everything - I am very confident there are enough applications, and some VERY big (i mean multi-$million) buyers in the bitcoin marketplace, that will defend the price - and think demand in worst case to hold above a valuation somewhere in the $15-50 range, somewhere towards where the bubble started. But will they get that low? remains to be seen. I could easily see them getting to $200+ again in the short term as well.
I'll buy via Paypal (verified) or 5Dimes transfer.
Low is a relative term though. Around $100 per BTC is a 1 billion dollar market cap and that is nothing in the world of finance. Western Union's CEO made a statement last week that they are thinking about somehow implementing Bitcoin into their system. Yesterday Paypal's president said in an interview that they are also keeping an eye on it and considering Bitcoin deposits. These are major players that would need a much larger network then 1 billion dollars. I hate to speculate on prices as I am just another voice in a million but just one of these players would easily push the market cap to 100 billion depending on how they use the system.
As far as central banks go and the radicals who say that BTC (or something like it) will replace the current monetary system IMO are living a pipe dream. The Dollar, Euro, Pound, and Yen have as much a chance of being overtaken by this as all of us driving electric cars in 10 years. Will it happen eventually?.... probably, but not until every last penny of profit is squeezed out of the current way we go about things. Bitcoin can be a nice little alternative to a clumsy and antiquated monetary system that is showing cracks in it's foundation.
The bottom line is that clearly central banks will not like it but unless the EU and/or the US come out and somehow ban the use of e-currencys, then Bitcoin is going nowhere and the days of sub $100 prices are most likely gone. Even if all the big players stay away (which is increasingly unlikely) I still see no reason why a 1 billion dollar market cap cannot be maintained for what equates to digital cash. This site above all others should realize the value of sending $500 down to Costa Rica.