Tuesday, September 6, 2011


Is gambling the future of Bitcoin- from the comments to James Surowiecki's column on Bitcoin;

I'm the CEO of StrikeSapphire.com, which is the only complete, legal Bitcoin casino. First off, Rob Lister's absolutely right, the difficulty of actually acquiring Bitcoins is partially responsible for the decline in trade, and partially responsible for propping up their value. That said, we view them as an almost-miraculous medium of exchange.

We're a legal casino, and we're not interested in trying to leverage Bitcoin's potential for conducting undesirable activities. That said, it's been our observation that a large majority of our signups (3/4ths or more) are Americans who can't gamble online, who've figured out the Bitcoin system and are trying to play. We have to turn them away to maintain our status...but plenty of other startup gaming houses don't. And it's only a matter of time before other casinos jump on this as a payment method that abstracts their legal liability in such a way that it can't be traced back to them. We don't, because we're paranoid.

But we do think that gaming is going to be huge for Bitcoin, for exactly the reasons you described in the article. It requires what Bitcoin provides: Anonymity, low transaction fees, rapid transactions. It also has the potential to move a huge amount of short-term trading through the market. We peg our deposits to USD, because we don't want to suffer the risk of doing everything in Bitcoin. When a majority of Bitcoin trades are happening to facilitate these types of transactions, they'll overwhelm the speculation in the market. The technologies to make it easier for the average Joe to buy Bitcoin are coming out right now, or in the works. What it will take to make the currency stable in the long term are businesses like ours that use it day in, day out for legal transactions just like we'd use PayPal or another e-wallet. We've already got depositors who figured out how to get Bitcoin just to play our games -- from countries where they don't absolutely have to go around the law to do so. The savings is so dramatic for us that I'd prefer to never use any other payment method. We're hedging our bets, but in the process we'll be opening the loop and providing yet another method for entry in and out of Bitcoin, by taking deposits in other currencies and allowing withdrawals to BTC. Points of entry right now are multiplying logarithmically and I don't see a reason why -- regardless of whether the current value of BTC holds or drops back to $0.01 -- it won't continue to be a viable payment method for us. At a baseline, it's at least as valuable as the 5-7% transaction fee we'd be paying with any other method.

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