Will Bitcoin / Crypto-currencies play a larger role in online gambling?

[John US Traffic]

it's deflationary and operates at the same principle as gold (limited supply). The number of bitcoins is finite.

Dan, have you really looked into how it works? There is nothing automatically deflationary about it at all, and in fact you are the first person I've seen suggesting that. Usually people suggest the opposite, in fact. Also, the "finite" number of Bitcoins can be a very misleading idea. Perhaps you don't know how extremely divisible Bitcoins are? The number of "whole coins" may be finite by design, but each coin is extremely divisible into fractional coins. So rather than being deflationary, you could have a whole lot of increase in value and purchasing power of just fractions of coins.

[DanHorvat]

Deflationary means you can't increase the supply, e.g. print money. Bitcoin doesn't work that way, period.

Inflation is good. It's the driving force behind economy growth.

[Jack Cartier]

For delation: "deflation increases the real value of money – the currency of a national or regional economy. This allows one to buy more goods with the same amount of money over time." [source wikipedia ]
"A deflationary spiral is a situation where decreases in price lead to lower production, which in turn leads to lower wages and demand, which leads to further decreases in price."
Those said it is ignoring the hyper inflation that occurs in germany in the 1920's....

[John US Traffic]

Not quite, Dan:

"Deflationary Spiral": >>hhttps://en.bitcoin.it/wiki/Deflationary_spiral

"It is a common criticism made against the viability of Bitcoin. The ‘deflationary spiral’ is a real condition that affects the popular fractional reserve backing system. Bitcoin is not affected by this because it is fundamentally different from popular currency."

"The key difference is that people don't foresee a fixed cost (unit amount) that they must pay with Bitcoin. If the value of the Bitcoins that they own increases, then any future cost will take a proportionally smaller amount of Bitcoins. There isn't any fixed incentive to holding Bitcoin other than speculation.

If the economy that uses Bitcoin grows, the per-unit value of Bitcoin proportionally increases also.

Everything is the opposite of the popular fractional reserve banking system (because Bitcoin isn't a debt but an asset)."

[DanHorvat]

The ‘deflationary spiral’ is a real condition that affects the popular fractional reserve backing system. Bitcoin is not affected by this because it is fundamentally different from popular currency."

It happened once maybe, during the Great Depression.

Tell me more about the second part. If I was to buy a cup of coffee, do I pay a fixed amount of BTC or only the relative price to say, $1 for a cup?

[universal4]

Just because someone disagrees that bitcoin is a viable alternative to currency does NOT mean they do not understand how it works or have not researched it.

And to infer that just because someone is involved in the IT field should automatically accept bitcoin is nonsense. There are plenty of those within the it field (as well as financial markets and just about all other walks of life) that are also against it.

And by the way, I am very familiar with the term "to be honest".

Rick
Universal4

[TheGooner]

John - I get it - we all get it- you're a bitcoin bug.
You've noted that Bitcoin has skyrocketed in value - and believe that it will keep going up. Forever? Really?

That's OK - I'm a bit of a gold bug.


=========

Here is where I am at.

Fiat currency (money issued by governments) does have weaknesses. It's supply is continually increased and that serves to reduce the value of the individual notes thus causing the effect we know as inflation (it takes more notes to buy the same item). Fiat currencies eventually fall or need to be revalued overtime. All fiat currencies have failed eventually.

Private Currency (money issued by private organisations) has the same weaknesses and more. As it is not back by any government, it cannot be used to pay taxes anywhere and so traditionally has had little to back it other than the strength of the company / org. All private currencies have failed eventually.

Gold and Silver are the original "bitcoin". These metals are rare (well rareish) and have been valued by civilisations for around 5,000 years as items that can be worked into jewelry or items of art or coins. They have a "baseline value" which can be roughly equated to the cost of mining the metals, which for gold is around $1200 per oz, and silver at $20. Note that many goldmines are closing at current prices because it is not economical to produce. I note that technology has found additional uses for gold (space technology) and silver (electronic and health), and those industrial uses also help to underpin the value.

Interestingly, while it's true that all metal currencies have failed eventually (seeing a currency pattern here? ) if you have an old central european gold coin for 20 francs, 20 guilder, or 20 roubles that weighs 1/4 oz, you can still get $300 to $350 for it today at any bullion dealer - which is almost exactly the equivilent or it's orginal worth when it was issued. Gold and silver tend to keep pace with inflation BECAUSE the cost of production keeps pace with inflation.

So what is bitcoin ?

Bitcoin is partially a virtual equivalent to gold. It's supply is finite. It has a base cost to "mine" a bitcoin (what is that at present?). But Bitcoin has NO other use - other than what it can be traded for. This makes BitCoin partially like a private currency too.

Currently Bitcoin has a following as a private currency (non governmental) between a small section of the population. It has risen on hype and simple supply/demand patterns.

Bitcoin is NOT a "store of value" - it's so unstable. It can - and does - gain or lose 10% in a day regularly. As such it's useless as an investment for a person. It's useless as a trade item for a retailer because a variation of 10% in a day makes the cost of goods in the supply chain impossible to predict.

Summary, Bitcoin has a cost to produce which should be considered it's real value, anything else is pure speculation - a bubble - and bubbles eventually pop.

[John US Traffic]

Well, Gooner (can I call you Gooner?), the plain and sober truth is that I am really not a Bitcoin bug at all despite the impression one may get. I've still never even obtained a single fraction of a Bitcoin (surprise?). All I've ever done so far is go through some of the motions in the free training videos I've posted about in Chatter Box, to do things like open an account or create a wallet and so forth. Btw, do check them out if you get a chance. But what is true is that I very strongly do believe that Bitcoin is a very good option to include in the industry for payments and deposits, including all of the legitimate issues and concerns which are certainly not secrets and are already fairly well known and addressed here and elsewhere. I genuinely also believe that an honest and thorough look at this little debate that has been occurring here would lead one to conclude that what I and the one or two or so who have been willing to post favorably have been posting has really been winning this debate, too, especially in terms of focusing on the original issue of a role in online gambling on one side vs. what on the other side is more like simply every conceivable and speculative reason one can think of to not support Bitcoin in general aside from that.

It's true that I do suspect, barring any catastrophic meltdown, that Bitcoin is likely to increase in value even further, perhaps much further, probably also along with some episodes of the type of valuation turbulence we've already seen. I'm already sitting on a paper loss for some shares of Zynga - and I if I could do it over again I would very gladly have gone into Bitcoin instead. But even if Bitcoin ever completely deflates like a bubble, which I doubt, I don't believe that kind of extreme doomsday scenario possibility has to be considered such a problem or deterrent, because as I've said before, nobody has to speculate and hold any Bitcoin for any substantial length of time if they don't want to.

I believe that what I am suggesting and advocating - for inclusion in this industry, not for Bitcoin as some kind of "way of life" - is really so simple and straightforward, but that all or most of these various objections and concerns really muddy the waters and distract from that. We have seen now, at least according to what I have read and posted here, that Winning Poker Network, for example, is working to go about including Bitcoin in a way that reduces or eliminates the types of risk commonly known and also addressed here. We have also seen a growing acceptance in the world in terms of what Bicoin can actually be used and "traded" for. According to what I even read recently, while a giant like Overstock has now also embarked upon a Bitcoin journey, not even they intend to actually hold Bitcoin, though I don't know exactly how accurate that is right now.

So all I'm really talking about now is doing something like what Winning Poker Network is reportedly doing. Right now all I am advocating for is including Bitcoin as a way for depositors to deposit if they want, and for players and affiliates to be paid. Especially if an option like Bitcoin could solve problems in terms of deposits and payments, I believe that can and is very likely to be a big win all around, and a new avenue of accomplishing something that might otherwise not have been attainable for everyone involved. If one does not wish to include this for the player aspect for some reason, for instance, then at least let it be added for affiliates. Like I said before, I already stopped promoting one of the best known programs here, for example, but if they only had an option like Bitcoin, I would still be doing so. They got something of a "mini whale" from my traffic shortly after I joined some time ago, so I suspect they would tend to like the idea of being promoted again.

Now let me spend a moment on this whole issue of secrecy and anonymity. Again, it's really more like "every conceivable reason to be against Bitcoin" rather than focusing on what's best for this industry, online gambling. Let's take a little step back in history for a moment. Anyone remember the UIGEA of 2006? Well, that of course is what blew up and decimated this industry and caused so much havoc, even though it never made online gambling illegal. And what do we know it mainly did? Naturally, it torpedoed the ability to make deposits. What kind of deposits? Anonymous and secret deposits? Of course not. Deposits using credit cards, PayPal and the like - non-anonymous, non-secret deposits in the eyes of the whole world and open to the light of day. That is what the customers of this industry mainly are - people who normally would jump faster than you can say "blackjack" at the chance to whip out their credit cards or log into their PayPal account in order to deposit at an online casino and start to play, not people who crave and covet anonymity and secrecy. I would even daresay that those who care so much about that are probably much fewer than some would think. All they do for the most part is give Bitcoin a bad name. I would also daresay that most people jumping on the Bitcoin bandwagon now don't care about that - and that Bitcoin isn't about to rise or fall based on the favor of those who want to use it for some clandestine purpose. And the people who want to sign up, deposit and play at the online casinos, who otherwise cannot or may have difficulty doing so, would gladly use their normal, mainstream, and open payment methods in a blink if they could.

[universal4]

The facts are that "one" of the early selling points of bitcoin is the anonimity aspect, and one can not ignore that. (it is part of bitcoin's history)

The facts are that the US Government wants the exchanges to play by world wide banking rules and many of them are trying to skirt that.

You are advocating that online casinos start taking bitcoin as a currency, yet you stated in an earlier post that bitcoin was not trying to establish itself as a currency, yet they are. Bitcoin is not merely a "payment method" if it was you would earn and exchange dollars, pounds, euros yen or some other form of currency, bot bitcoins.

All worldwide currencies can be volitile at times, and ony one of them could have their bubble burst, but it is less likely to happen with dollars as opposed to bitcoin in it's current state today.

I would like to see PayPal as a viable option at online casinos, but it is NOT for US Residents.

Rick
Universal4

Side note: If the bubble would happen to burst completely on the dollar, yen or pound the entire world is in trouble. If/When the bubble bursts on bitcoin many will lose, but a few of the other coins will jump in value if they do not crash at the same time.

[John US Traffic]

You are bringing us back around in circles now and I have already dealt with and addressed these very determined naysaying objections, rather successfully I would suggest. Some of what you write now is also not exactly an accurate representation of what I've posted, so there's not only a bit of a straw man argument going on in your paragraph on "currency" and "payment," but one which also appears to have no real substance or relevance even as an actual objection for inclusion in the industry. In fact, I would think the last thing you would want is for all my previous quotes here on that particular element to be seen. I would also suggest, at least for the benefit of the other readers here, that anyone honestly reviewing this whole thread would and should generally tend to conclude that all these naysaying objections and points of opposition you and others have expressed have been quite adequately and successfully dealt with and defeated, and that the case has been adequately made for Bitcoin as an asset worth considering and including as a potentially profitable and desirable supplementary option in the business of online gambling and/or online gambling affiliate programs, just as is already taking place with some famous Bitcoin based enterprises, the Winning Poker Network, and if in any other online gaming venues yet I am not aware of that now. As I have also already indicated, I am personally not advocating a "pure Bitcoin" play only, but rather something resembling what the Winning Poker Network is reportedly engaging in. On the matter of "selling points," one additional note I would add is that if one actually reviewed the free training videos I've posted about elsewhere, then one would also see why mainstream merchants have a huge incentive to make Bitcoin work and promote its acceptance because they can save a fortune in transaction fees. The videos are very well done, so once again I highly recommend taking advantage of them as well, especially since they are free.

Bitcoin is an option to be enjoyed and taken advantage of to the fullest for as long as one can, and if it ever "goes south" then it would simply be time to drop it and move on, in the same way that credit cards and the like had to be dropped and moved on from for such a big part of the industry and gaming market.

---------------------------------------------------------

P.S. On a side note, earlier today I happened to catch notice of this interesting article, but only because I was checking out InfoWorld.com and not looking for anything on Bitcoin at the time:

"More than money, bitcoin's real value lies in its algorithms" - xxxhttp://www.infoworld.com/t/encryption/more-money-bitcoins-real-value-lies-in-its-algorithms-234162

[universal4]

Just because YOU say they are naysaying comments does NOT mean that to others.

Advocating the use of bitcoin and then stating that if it "goes south" it's ok does nothing to let those who could be seriously hurt financially understand the risks involved.

In my opinion you have NOT successfully dealt with and defeated all objections.

I agree that anyone considering the use of bitcoins to read this entire thread as well as hundreds of other threads on many different sites, but if a user contemplating their use only ever read all the fluff and hype behind bitcoin and was not presented with the other side, they could be taking on a GREAT deal of risk without knowing all the facts.

Rick
Universal4

[John US Traffic]

Just because YOU say they are naysaying comments does NOT mean that to others.

Well I've been around the block a few times, so I don't say that lightly. I believe a careful, accurate and honest reading of the thread should lead one to agree even if any wish to say otherwise. What you've been doing here really reminded me of those court room drama shows where one of the lawyers objects on the grounds of "Argumentative." I've been the one really staying on topic, while what you and some others have been doing is merely throwing up "every conceivable and speculative reason and extreme dire possibility to be against Bitcoin in general" regarding issues that are already well known and would be factored into the matter as I've indicated before.

Advocating the use of bitcoin and then stating that if it "goes south" it's ok does nothing to let those who could be seriously hurt financially understand the risks involved.

No, on the contrary we have already addressed that in the thread. Moreoever, "the risks" also stands squarely in the domain of "common knowledge" about Bitcoin now as well, and nobody here or that I've ever seen is even remotely trying to hide or deny the commonly known issues and elements of risk involved. Furthermore, if you ask me, this kind of thing is an even infinitely higher "risk" of being financially hurt than Bitcoin to begin with, and I think you'll have a really super hard time finding many outside the industry that don't agree with that: "Software Found Rigged." Then of course there is the risk we take as affiliates, and the question of whether we are really being dealt with honestly and rightly.

In my opinion you have NOT successfully dealt with and defeated all objections.

And I'll say it again, I think an honest and thorough review of the whole thread would and should tend to conclude otherwise.

but if a user contemplating their use only ever read all the fluff and hype behind bitcoin and was not presented with the other side, they could be taking on a GREAT deal of risk without knowing all the facts.

And that's exactly what has not been going on here, and neither with any serious and reputable advocates of Bitcoin I've ever seen. In fact, not with any advocates and supporters of Bitcoin I've ever seen.

[universal4]

I have read an awful lot about bitcoin and I have done so very very carefully, and in my opinion I still disagree with you.

You keep making assumptions that everyone has to agree with you upon reading what you ask them to.

An honest read of this thread or any of the other information out on the internet about bitcoin will still lead people to have a difference of opinion on the matter, and just because you say over and over otherwise does NOT change that fact.

Of course advocates and supporters of bitcoin will disagree with me, and some people disagree with you.

Just because someone disagrees with you or the viability of bitcoin ever becoming a real currency, does not mean they haven't performed some of their own research into it.

Rick
Universal4

[DanHorvat]

Bitcoin is deflationary, meaning it has limited supply. The number of bitcoins is finite and one may expect the value of each bitcoin to rise once the ceiling is reached, as there will be no new bitcoins. I'm not saying this is good or bad, but it's a fact. Bitcoin is deflationary currency, meaning the value of each unit will rise instead of drop.

This is totally different than inflationary currencies where governments print money to keep up with the ever rising supply of goods. Hyperinflation is destructive, but inflation is the driving force of the economy and no currency can be healthy without it. If your currency doesn't have small inflation, you're in big trouble.

Deflationary currencies promote hoarding as it makes more sense to keep the asset and wait for its value to increase, while inflationary currencies promote spending. If you inverse it, and hoard inflationary currency and spend deflationary currency, you're losing money.

Spending bitcoins is an unwise decision. People do it only because they don't know what to do with them. I'm all for giving those people a hole in the ground to throw their bitcoins in. An online casino.

But that online casino would also be hoarding, not spending. It would be doing what makes sense - spending dollars and hoarding bitcoins. Because Bitcoin is not a currency and never will be, it's an asset.

[John US Traffic]

I have read an awful lot about bitcoin and I have done so very very carefully, and in my opinion I still disagree with you.

You keep making assumptions that everyone has to agree with you upon reading what you ask them to.

[...]

Just because someone disagrees with you or the viability of bitcoin ever becoming a real currency, does not mean they haven't performed some of their own research into it.

I'm often willing to "agree to disagree," even "without being disagreeable," but in this case I really get the impression that you are in denial about your objections having been successfully dealt with and defeated; moreover, you seem to have no realization whatsoever that your objections and presentation of "the risks" and "the other side" is already generally factored into the growing acceptance and popularity of Bitcoin rather than something new or some exposing ray of light to rescue people from the darkness of unenlightened hype. It really seems like with you every single thing I post just "goes in one ear and out the other" so to speak, and that you really are filling the role of a "naysayer." Additionally, you sometimes are putting words in my mouth as the saying goes. For instance, I couldn't care less whether it "becom[es] a real currency" or whatever you want to call it, have no interest in contending anything about the question of "real currency," and have even already stated something different, that it is only "virtual currency, as in 'virtually' currency," with emphasis on the "virtually" part. Whatever you want to call it, to some degree that issue becomes merely a question of semantics. Clearly, among other things, people already use it in the role of what we fundamentally know of as "money"; and I don't care. The thing itself is called a "cryptocurrency"; and I don't care. Consistent with what I have already posted or quoted before here as well, and not as if Dan's final word below is any kind of revelation or refutation in the thread, Bitcoin is also functioning or being used as "an asset"; and I don't care. My main contention all along has been and is that Bitcoin is suitable and desirable for "a larger role in online gambing" (see the title of this thread) now, including a recognition of all the various points of concern that are known about it. Since to my knowledge it has virtually no real role in almost all of online gambling, except for the lesser known pure Bitcoin based businesses and now the Winning Poker Network, "larger role" in this case really amounts to something "greater than" no role at all, as in "greater than zero," and as (and how many times does one need to say it?) only a supplementary option for those who want it, from player to operator to affiliate.

Another thing you have been doing here is harping upon the "extremes," the worst case direst of doomsday logical possibilities, all of which are also generally known and factored into the growing acceptance and use of Bitcoin.

Just before my last post you even warned not of those who could be "hurt financially," but "seriously hurt financially," and "a GREAT deal of risk"; but let's look at that for a moment, and how exaggerated and extreme it is in the context.

It's almost as if you simply haven't been reading a word I have said all along, really, so I'll remind everyone for the benefit of all concerned. I have been talking about using Bitcoin as a desirable and potentially advantageous way of facilitating online gambling, of making deposits and receiving payments. As a general rule, people who go to participate in and enjoy online gambling: are already intent on taking the risk of being "hurt financially"; they already know that no matter what form of "money" they are using, it's possibly about to be lost; they are also - again as a general rule - only risking an amount they know they can afford to lose, and again no matter what form it takes. So where in the world is this "seriously hurt financially" you could possibly be imagining in the context and in response to my posts and in the real topic of this thread? So far, nowhere but whatever you were imagining is the real topic and whatever it is you imagined you were responding to. This thread and what is being proposed here is certainly not about putting one's life savings into Bitcoin, or even a substantial portion of it, for instance. Moreover, how many times is it necessary to mention how nobody has to hold onto Bitcoin for any substantial or speculating amount of time before it becomes acknowledged, unless of course one only wishes to push and focus upon the extreme doomsday possibility of a plummet in value to $0 so fast while they are still holding it that someone actually does wind up taking a loss - the very amount they were eager to risk losing in online gambling to begin with? Now for the benefit of the doubt and to be thorough, is it possible then that you were only thinking of the operators and affiliate programs themselves as being at risk of being "seriously hurt financially," since they would have to deal with larger amounts of Bitcoin than individual customers? Well, I seriously doubt that was what you honestly had in mind, but even if you did, I would suggest for consideration that the ladies and gentlemen involved in the online gambling industry among the operators and affiliate programs are smart business savvy people, and that they would know quite well how to manage and minimize any risk associated with merely including Bitcoin as a supplementary new option, and how to consult among themselves and with others knowledgeable and experienced in the matter so as to minimize, manage, and as much as possible eliminate exposure.

Bitcoin is deflationary [...]

[...] it's an asset.

Yes, Dan, definitely an asset whatever else it may be or function as, as I've already indicated myself. As for repeating your "deflationary" issue, however, I was really under the impression that was already dealt with rather well in posts #82 to #85 above, but perhaps that's just me, and I guess you just don't agree. I guess the readers will also have to decide that for themselves regarding the larger issue of Bitcoin in general and long term, but it is also off-topic from "a larger role in online gambing."

------

In closing here, I will move on now and just mention one other excellent "selling point" and advantage of Bitcoin in addition to the one I mentioned before about saving a fortune in transaction fees. This one is especially suitable and advantageous for the online gambling industry, and that is the issue of chargebacks. With Bitcoin, there is no risk of that; they simply don't happen, and they can't happen. Now that's a nice advantage. And lest anyone try to diminish and confuse that advantage, however, for good measure I will mention that obviously there may occasionally be certain situations of "policy" in which the operator itself may wish to bar or refund a specific deposit, but with those normal realities of life in mind, the general reality is that Bitcoin is basically bullet proof when it comes to chargebacks. And that's a nice selling point.

[universal4]

You keep saying I am in denial and I have told you NUMEROUS times I am NOT!

I disagree with you, and just because you keep trying to tell others and lying to yourself that I am denying you overcame my objections is getting old.

In MY Opinion, neither you nor anyone else has overcame them and it is an opinion shared by many accross the net. Some agree with you and some agree with me and some are still taking a "wait and see" approach.

I feel strongly that bitcoin will fail as a currency, and that is what they are trying.

I also feel many will be hurt by it.

It appears more like you are the one in denial just because others disagree with you and are willing to state that, and the method of combatting that is to claim I feel otherwise.

Rick
Universal4

[Imperator]

For all the opposers, everyone has their right of opinion. However, when you see a 6-9-12 month old gambling sites, registering more bet volume and much stronger financials than 80% of the real money casinos out there, you can't ignore the potential upside of it for the gambling industry. Bitcoin is an entirely new revenue stream for the online gambling operators as were mobile betting, social casinos, live casinos, and any other vertical that was introduced in recent years. Will it fail... maybe or maybe not, but why not reap the benefits of it while it lasts?

[DanHorvat]

I feel strongly that bitcoin will fail as a currency, and that is what they are trying.

Exactly. But I'd correct you in one important part - I believe Bitcoin knows it's not a currency. Regardlessly, being a reserve currency is its selling point. You couldn't get that many people involved if you called it what it is - online gold.

As a general rule of thumb, I stay away from heavily marketed snake oil. Although I think Bitcoin does have a certain future, guys like John and the guy in the video he linked to, and all the hype surrounding Bitcoin is my main reason for not owning a single BTC. I detest SEO companies, real-estate agents, $1.89 web hosting companies, marketing experts, calls to action, scientific research being done through a poll, and guys like the one in the Bitcoin video.

But, I repeat, I'd start a BTC casino given an opportunity, as I tend to agree with what Imperator said.

[universal4]

I do not ignore that some may well make some money with bitcoin, but in my opinion it is still not good for the industry and I do feel the day will come when many many will lose a barrel of money because of bitcoin also.

A portion of the technology used can and possibly will be absorbed into the current ewallet systems in place, but despite their flaws, I think that bitcoin itself, as well as all the bitcoin wannabe's popping up are not needed.

Just because the world has advanced on the technological front, does not mean we need to revamp the entire world's currency system, we just need the banking industry to understand some of the thoughts and drive behind bitcoins, and make their systems better and more secure.

Rick
Universal4

[ocreditor]

I do not ignore that some may well make some money with bitcoin, but in my opinion it is still not good for the industry and I do feel the day will come when many many will lose a barrel of money because of bitcoin also.

A portion of the technology used can and possibly will be absorbed into the current ewallet systems in place, but despite their flaws, I think that bitcoin itself, as well as all the bitcoin wannabe's popping up are not needed.

Just because the world has advanced on the technological front, does not mean we need to revamp the entire world's currency system, we just need the banking industry to understand some of the thoughts and drive behind bitcoins, and make their systems better and more secure.

Rick
Universal4

Couldn't agree more !