SatoshiDice Player Bets 0.02 BTC, Wins 1280 BTC

For the first time, someone bet on "less than 1" at SatoshiDice and won, turning 0.02 BTC ($0.60) into 1280 BTC ($38,000).

The odds of winning were 0.0015% or 66666:1 (haha, very funny guys).

You can see the transaction here.

Shameless plug: if you're looking for a place to test your luck with Bitcoins, be sure to visit betwithbtc.com.

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Bitcoin Casino "Bitzino" Posts Some Impressive Stats for 2012

The Bitcoin online gambling business is getting a lot of attention these days. No wonder, after Bitzino just posted some impressive numbers for 2012. Here are some of the highlights:

- 28,986 BTC cashed out by players;
- 0.0031% paid in transaction fees (less than 1 BTC, total);
- Average withdrawal wait: 9 minutes
- 50% of withdrawals occurred in under 1 minute;
- 3.2 million wagers placed (1 wager every 5 seconds).

Here's a link to the full report: https://bitzino.com/about/numbers/2012

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Bitcoin Gambling Site Earns $230,000 in December; Raises Eyebrows

SatoshiDice just announced their revenue numbers for the month of December, and they were record-breaking (all numbers in Bitcoin):

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December Statement

Summary:

Earnings: 17,266.45
Hosting/Tech Expenses: 60
Loss Carryover from Nov: 0

Net Profit 17206.44888669

Volume over past 30 Days 527,708.52
Expected Profit over past 30 Days 10,026.46
Actual Profit over past 30 Days 16,632.74

Updated P&L 

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Almost as impressive as their earnings was the cost of their overhead, an astoundingly small 60 Bitcoins.

You can read more about SatoshiDice in a previous article, here.

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SatoshiDice - A Test Case for Bitcoin Gambling

Early on, in was apparent that the online gambling scene had the potential to benefit from Bitcoin. Obviously I was not alone in that thinking, as dozens of Bitcoin gambling sites seemingly sprung up overnight, most of them looking like they were coded by five year-olds or Nigerians, or Nigerian five year-olds.

The majority have gone the traditional route of offering tried and tested games like poker, blackjack, or slots, but some have utilized the unique properties of Bitcoin to truly change the way people gamble online.

Enter: SatoshiDice.

Let me draw an analogy to try to explain exactly what SatoshiDice has achieved. Imagine for a second that you have a bank account with Chase, or any other bank that offers online banking, and you are logged into your online account. On the side of the page you are given the option of making bets. For example, you can send up to $3000 to another account, and instantly receive $12000, with a 24.41% chance of winning. Or you can send $2000 to another account and instantly receive $3914, with a 50% chance of winning. There are many other betting options available to you with a very slight house edge, and profits appear immediately in your bank account and are available for spending.

You could probably see how this might be addictive to a gambler, and tempting to anyone who has the option. If you have a Bitcoin wallet, this is reality.


So, how well has the site done? Very well... EXTREMELY well.

In the month of December alone, SatoshiDice's profits amounted to an impressive 17,206 BTC or $230,000 USD, with total profits on the order of 40,000 BTC or over half a million dollars.

(Total SatoshiDice Profit: Chart courtesy of forum member dooglus)

Transactions to and from SatoshiDice notoriously represent a large percentage of all Bitcoin transactions. As an example, alone there have been 700,000 transactions to/from the 50% odds betting address.

SatoshiDice has essentially laid the path for a new type of online gambling, one where you do not have to give a site your personal information and where deposits and withdrawals are near instantaneous.

Betwithbtc.com lists a few of the reasons why Bitcoin gambling could be important:

• With Bitcoin, transaction fees are less than a penny, regardless of the amount transferred. 

• Bitcoin transactions are not reversible. This means that online casino operators do not have to be concerned with chargebacks, and can therefore allow users to clear bonuses much quicker than in traditional online casinos. 

• Gambling sites can pass on their savings to players, increase your odds of winning, and offer better bonuses. 

• Credit cards charge "cash advance" fees when you fund online casinos. Those fees do not exist with Bitcoin. 

• Bitcoin transactions are virtually anonymous, and are not associated with a geographic location. 

• Withdrawals to your account are now instantaneous. No more waiting, no more checks, no more fees. 

• Keep your personal information to yourself. No names or addresses required. Your Bitcoin address becomes your identity. 

• No risk of having your credit card stolen. 

• No risk of having your identity stolen. 

• Since complicated payment processor software is not required, and micro-payments are possible, Bitcoin opens up a micro-gambling world that has never been seen before.

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No doubt, with the profits shown by SatoshiDice, the stalwarts of the online gambling industry are surely taking notice, and it may not be long before the larger sites start accepting Bitcoin.

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New Poker Site, Infiniti Poker, to Accept Bitcoin

It looks like start-ups with deep pockets are starting to get into the Bitcoin business.

Infiniti Poker, launching next spring, will be accepting Bitcoin alongside the usual payment processors, and also appears to be incorporating a social networking feature; something new for online poker.

Regarding Bitcoin, they say:

We are pleased to announce to players across the planet that YES! We do accept Bitcoin! At InfinitiPoker.com, the world's most interactive and entertaining poker site, we guarantee the easiest, most efficient and secure way to play cash games.

For years, players have frequently expressed their dissatisfaction with the inconvenient deposit and withdrawal methods of many other sites. Infiniti Poker has taken a cutting-edge approach to the overall improvement of the efficiency and expediency of your deposits and withdrawals through the accepting of Bitcoin as an option along side the traditional means of fund transactions you are already familiar with.

As the premier online currency in the market, Bitcoins can be sent instantly and Internationally, be converted to and from other currencies and is not subject to being handled and/or processed through intermediaries such as banks and credit card processors.

Convenient, safe and easy!

Benefit from our belief in serving you. Benefit from Bitcoin technology at Infiniti Poker. Subscribe to our newsletter to learn more about Infiniti Poker and Bitcoin.

It remains to be seen whether their game-play will be as appealing as their promotional site.

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Bitcoin and Conventional Business do not Mix

It's time to be truly honest about what we're up against in terms of motivating the adoption of Bitcoin.

Imagine the best-case scenario where Bitcoin exchanges accept credit cards, directly. There is absolutely no way they will be able to drop a credit card deposit fee below a very generous 2%, and that's assuming that chargebacks won't happen, which they will.

Add the additional 0.5%, or so, that you would have to pay for actually buying the Bitcoins on the exchange, and you're looking at a minimum of 2.5% in fees from the get-go. That 2.5% already negates any savings that a merchant could offer for someone willing to pay with Bitcoin. Right there, we know it makes absolutely no sense to offer a product or service for Bitcoin when the same thing can already be acquired with credit cards or PayPal. Now you understand why Cheaper-in-Bitcoins made almost no sales whatsoever, and why you'll never see Amazon adopt Bitcoin.

We also talk a lot around here about charities or non-profits that accept Bitcoin donations. Again, no one is going to go out of their way to acquire Bitcoins in order to make a donation; it just adds an unnecessary extra step. Nor are people going to acquire Bitcoins to be able to buy indy-music, make micro-donations to blogs (too bad!), or pay for shareware. Independent artists, writers, and software developers should accept Bitcoin as a secondary source of income, but it will never make up more than a small percentage of their revenue. Bitcoins will eventually trickle into their pockets, but they won't spur the actual adoption of Bitcoin.

So, if conventional online businesses and charities are out the window as motivators for Bitcoin adoption, then what will actually do the trick?

1) Illegal markets. Where there is a desire to maintain as much anonymity as possible, Bitcoin will thrive. Silk Road is what put Bitcoin on the map, and it continues to operate successfully to this day. There is no denying that Bitcoin will become the preferred method of transacting in illegal markets, because it gives an obvious advantage to both clients and merchants.

2) Virtual markets. Virtual currencies could always be purchased with credit cards, but then the user was constrained to one platform. With Bitcoin, users can move their money between different virtual worlds, assuming they eventually support Bitcoin. This is a multi-billion dollar market that can be exploited.

3) International markets. There's never been an easier way to move money across borders. Any business that can take advantage of the agility of Bitcoin will do so.

4) Online gambling. The reason why online gambling and Bitcoin make a great match is because of the ability to easily withdraw Bitcoins from a casino. Until now, it's usually been a pain in the ass to retrieve your winnings. Being able to get your money out of a casino as quickly as you got it in is sufficient motivation to go out to the bank and wire some money to an exchange.

5) Investing. If 1, 2, 3, and 4 begin to catch on, then Bitcoin will continue to be a viable investment for those looking to move their money out of fiat currencies and maybe diversify their precious metal portfolios. Given the ever-worsening sovereign debt crises, Bitcoin will become an even more attractive investment.

Between these five motivators, we're still looking at the possibility of a multi-billion dollar Bitcoin economy. Therefore, at the end of the day, we shouldn't get too worked up about whether or not Amazon or Wikipedia will eventually accept Bitcoin. Bitcoin's strength is not in the conventional.

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First "Real Money" Poker Site is Accepting Bitcoins

Switchpoker.com is now accepting Bitcoin as a deposit method, in addition to the usual deposit methods.

Switchpoker does not accept American players and asks for your full contact information before you can deposit, which might catch the average Bitcoin poker player a little off-guard. With Bitcoin, however, your deposit will validate regardless of the validity of your contact info. Since I'm not American, I can't readily verify if they're blocking Americans by IP address or simply using the honor system, though I suspect it would be the former.

At the time of this post, there were 14 real-money players online. We'll have to see how many players are online in the evenings and on the weekends.

All games are denominated in Euros.

As a test, I deposited 20 Euros to the site, using a VISA card via Moneybookers. I was then given the option of converting my Euro balance into a Bitcoin balance. The rate offered at the time was 11.09 BTC for 20 Euro (1.80 Euro/BTC). The Mt.Gox market rate is currently 1.77 Euro/BTC, which means Switchpoker is actually a very decent way of buying Bitcoins by credit card. I'll be curious to see if my credit card, however, has charged me a cash advance fee for depositing to Moneybookers.

Edit: I had mentioned that Bitcoin deposits and withdrawals had to go through Bitcoin247. Apparently that is not the case and you can deposit and withdraw directly from/to your own wallet.

Switchpoker appears to be getting around potential chargebacks by using Moneybookers' "skrill," which has a merchant-friendly chargeback policy.

Although Switchpoker is a tiny site, this event is very important for Bitcoin, as it's the first time a gambling site is accepting normal payment methods and Bitcoin side-by-side.

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A Survey of the Bitcoin Gambling Economy

To date, no method of analyzing Bitcoin transaction data has been found sufficient to gauge the state of the Bitcoin economy. In order to finally acquire such data, a survey, the first of its kind, was created to canvas all existing Bitcoin gambling site-owners, covering a range of high-level questions to determine the size and nature of this particular segment of the Bitcoin economy.

The survey asked the following questions:

- In terms of betting volume, which gambling game is played most frequently on your site?
- How large is your user base?
- How many of your users have deposited Bitcoins to your site?
- Where do your users come from (broken down into most, second most, and third most frequent country of origin)?
- What was the total amount of Bitcoins deposited to your site in August, 2011?
- What was the total amount of Bitcoins deposited to your site in September, 2011?

Of the 35 sites known to exist, 26 had contact info and were asked to complete the survey. Nine site-owners responded, covering nearly the entire range of Bitcoin gambling options, giving us enough data to create a useful snapshot of the fledgling Bitcoin gambling economy.

Most Frequently Played Game Type

There was almost no overlap in the types of sites that responded, except in the Lottery segment, where two sites responded to the survey. As a result, we have a well-rounded dataset.

Total Users - Registrants vs. Depositors

The survey did not ask for specific numbers, but a range. It looked like this:

To generate the graph, I used the high end of the range in the response, therefore the numbers are slightly skewed to the high side. More important, however, is the ratio between the two, which varied widely. Some types of gambling sites make registration and depositing one-in-the-same; those sites are clearly visible in the graph.

Ignoring sites where users and depositors are equal, conversion ratios are anywhere between 10% to 80%, depending on the site.

Demographics

Not surprisingly, and in line with host connection statistics, Americans make up the largest user-base for most gambling sites. Canadians, Germans, and users from the UK cover off the vast majority of the remainder.

Deposits

Again, the survey asked for a range value in response to the question of how many Bitcoins are being deposited to each site. The high-end value was used to generate the graph, so the numbers are skewed to the high side.

For Site 5, the responses were 1001-2000 BTC for August and 501-1000 for September. The graph gives the impression of a 50% drop in deposits, though that is most likely not the case. In retrospect, I should have provided a set of answers with smaller range options above 500 BTC. Nevertheless, the overall trend is a constant or increasing rate of deposits. Given that the value of a Bitcoin has dropped considerably from August to September, the overall revenue for Bitcoin gambling sites is likely steady or down slightly, though business appears to be healthy at this early stage in Bitcoin's evolution.

Taking the average of the ranges, total deposits across these nine sites is in the vicinity of 3000 BTC per month for each August and September, or 15,000 USD at today's Bitcoin market value, demonstrating how much room there is left to grow in this multi-billion dollar segment of the online economy.

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For further discussion, please head over to the Bet with Bitcoin Forums, or leave your comments below.

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Interview Series Part 1: Josh Strike - Strike Sapphire Casino

Josh Strike is the founder and CEO of Costa Rica based online Bitcoin casino, Strike Sapphire. In this exclusive interview, he describes the entertaining path he has followed to get into the online gambling business, the challenges he has faced getting there, and he gives us his insight into the future of Strike Sapphire and Bitcoin, with some interesting revelations.

BT: Where are you originally from, where do you live now, and what is your background in terms of education and previous employment?

JS: I was born in LA, but most of my family has lived in Las Vegas since the early '70s. I grew up around floor managers, pit bosses and bartenders, and I spent a lot of my childhood in the coffee shop at the Sahara, keeping track of my Mom's keno cards and wandering around the edges of casinos hiding from the Sheriff while my Mom played slots.

I started to think in terms of odds at a pretty early age. I remember stealing a bunch of keno cards so I could set up a game for my friends in third grade. Around the same time, my half brother graduated from Cal Poly SLO [California Polytechnic State University, San Luis Obispo] as a programmer, and gave me his TRS-80 Model 100 laptop from RadioShack, along with the original manual, which had everything you needed to know to start programming in BASIC. It had 16k of RAM, ran on AA batteries, and I took it everywhere, along with a tape recorder for saving programs. So I was sitting in Vegas, turning the odds on keno cards into little simulations when I was eight years old.

Later on, in 1995, I got a summer job doing graphic design for an ad agency in LA and worked that and a coffee shop job until the end of high school. I then moved to a crackhouse hotel on Jones & Geary in San Francisco and got a job in Web design, and taught myself Flash and PHP. After the bubble in 2000, I tried college for a year at Pratt Institute, but I'm not a big team player and organized education didn't agree with me. I was getting burned out on design, so I dropped out and became a cab driver for a couple years in LA. After that I drifted to New York and waited tables at the Carnegie Deli and Deluxe on Broadway, and dealt underground blackjack & poker games in Harlem and the Bronx all night. Finally I found myself broke in New Orleans after a bad three weeks of solid gambling, and took the train back to LA to start my life over.

Once back in LA, I got a job working for a guy who ran an instant postcard montage kiosk at a mall, and did Bar Mitzvahs, and worked for him as a speed-Photoshopper for about a year doing 20

montages an hour. He introduced me to his cousin who was starting a doggy daycare center in New Jersey called the Barker Lounge, and that's when I started coding again seriously. The Barker Lounge wanted a ton of original software written to manage the franchises they were planning, and I knew I could do it. Right about then my apartment got broken into and all my s--t stolen, so I made a deal with the owner of the company so I could get an advance and write the software from abroad, and my girlfriend and I moved to Argentina. That was the foundation of the Strike Agency, which is my day job. Since then we've worked and traveled across South America, New Zealand, Australia, Thailand, Vietnam, France and Spain.

BT: How did you get started in the online gambling business?

JS: I guess I came by it honestly, but I'm definitely an outsider in the business, to put it mildly. About 3-1/2 years ago in New Zealand, I was the only coder on contract for the now-defunct sexypolitics.com, which was this video strip quiz site about the 2008 elections. It ended up getting bought out by Fox, who shelved it. I sat down to think about what to do next; I wanted to start my own site, and I compared a bunch of different business models.

I couldn't get past the allure of gambling. I knew it would be hard to satisfy the legal regulations, but it turned out I had no idea how hard that would actually be. I just happened to have the time and money to sit down and do something for myself, so I started writing a casino. I had the basic framework for Sapphire and a working blackjack and poker game in about six months; after about a year I had ten games. I started beta testing, ironed out a lot of bugs, and by the end of year two we had about 15 games and a couple of lawyers on board, and I thought we were ready to open for business.

I actually thought it was as simple as incorporating in Costa Rica, staying away from US players and signing up with some payment processors. Man was I wrong. Online gambling is a tight club, and they aren't accepting members - ever. Pity the fool that wanders into this naively. You've really got to do something unique to break into the club. I spent a year talking with lawyers and investors and payment processors, trying to get things working. The bottom line was, we probably couldn't have launched it for less than seven figures. And then along came Bitcoin...

What's been awesome about Bitcoin is, we get to start small and focus on the software. We can test the system, train employees, learn day-by-day how to run it, and be making enough to prove the concept from day one, without breaking any laws anywhere or exposing ourselves to more risk. And it's completely possible that in a year or two we could actually bootstrap it to other payment methods, without ever paying to buy into their club, and they'd be scrambling to catch up with us in the Bitcoin market. That's how I'm thinking, and I love the idea.

BT: How difficult was it to write the software?

JS: I wrote it, and rewrote it, and rewrote it. It's about 500,000 lines of code, front and back, and I know every line by heart. I don't think it could've been written any other way. One of my heroes is Chris Sawyer, who wrote Roller Coaster Tycoon back in 1999. He is supposedly the last person to publish a game that is completely written by one coder. I wouldn't compare myself to him because he writes in Assembly and he's a complete genius, but I've always believed in the DIY ethic.

BT: Are there any additional features coming to Strike Sapphire?

JS: Yes. I'm adding new features constantly, and soon I hope I'll be adding coders who'll be adding more features. Since we launched, I've brought in lobby chat, special FX for VIP players when they win, and improvements to a lot of the underlying systems for smoother performance in a lot of games. But more than anything else, I want to focus on inventing new games. So far, I think Mayan Gold, Sixty Watt Slots and Sapphire Keno are our most original, but there are about six more I've got on paper right now that'll seriously blow people's minds. I just need some spare time, because suddenly I'm deep into casino management and expansion and trying to train up new employees.

BT: Why should I gamble online at Strike Sapphire vice other Bitcoin casinos?

JS: Well, I could give you a stock answer but I guess, if you dig it, do it. I think the fact that all our table games are multiplayer gives us an advantage in the community because people can play and

meet each other. Right now, we're the only truly legal complete casino with a full spectrum of original games, with an actual corporate structure and lawyers; what you kind of expect from an online casino. As far as I know, we're the only one that isn't based in the US, and we're also the only casino in the world running our software. I'm hoping the software, and the atmosphere, will be the two biggest draws to players. We really try to keep things chill and friendly, and get to know our players personally. It's a very social, chatty casino. One guy accused me of running a tea room instead of a poker room!

Also, we do things with a level of transparency that no other casino does, like showing every single blackjack shoe and publishing our randomness reports every day. I'm not going to hammer on the bonuses or freerolls or whatever, because every casino has stuff like that, and honestly ours aren't as loud and splashy as others. But with us you know what you're getting. I think people should just check out all the sites and decide for themselves if we're better.

BT: Do you have any other projects in the works?

JS: (laughter) I'd like to build a 14-foot-wide version of Mayan Gold and put it in the Luxor, but I had a fight with the architect, and I'm kind of full up right now anyway...


BT: What sorts of projects would you like to see developed for Bitcoin?

JS: Anything that makes it easier to transact through Bitcoin is a good thing for the currency, and a good thing for us. I think the biggest hurdle is exchange, so I love the ATM concept, and the green address idea; we'd love to work with that. If you have a larger volume of generic, day-to-day transactions going on all the time, the market will stabilize and you'll have less volatility, less speculation. I think bootstrapping Bitcoin as a global currency is going to be a two-step process, and step one is stabilizing it as a medium of exchange between other currencies - a cheap way to get money online and send it to someone who can withdraw it. The second step is we have a completely functioning Bitcoin economy where you don't need the exchanges, and then the doors come off. Step one seems to me a prerequisite to step two, so we're happy to be helping with that.

BT: ...so I guess you think Bitcoin has a pretty bright future!

JS: I think it has an extremely bright future, and I'm not the only one. One of my partners in this project, who contributed to our initial float investment, was a co-producer on two of the three best-selling video games of all time. He prefers to remain anonymous so that's all I'll say, but it was my decision to go with Bitcoin that convinced him to get into it. Another friend of mine who works for Yahoo in a senior payment-related role has been asking me about Bitcoin too. People are curious. I think it needs to gain critical mass, and part of that is going to be ease of use, including ease of use as a simple exchange instrument without having to hold it or worry about it going down.

Another important thing is showing that the community can police itself so that Bitcoin doesn't end up being a medium of exchange for mostly illegal businesses. That's one reason we try so hard to be compliant with US laws, and I wish other casinos would see that it's in their best interests to do that too.

I think Bitcoin will go through a period of increased hardship as governments crack down and a lot of the sites you see now are targeted for illegal activity. All that's an excuse for governments to demonize the currency, to delegitimize it. But in the end, I don't think governments can actually shut it down. And if more legitimate sites pop up that have nailed down what we have - basically a plan for working within the system at the early stages, keeping it legal, hedging Bitcoin risk and just using it as a free way of receiving payments - then an explosion of Bitcoin value could happen pretty fast. That explosion has the potential to radically change the world.

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