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Bitcoin: Back to the Future - Betting Bitcoin - The definitive Bitcoin Betting guide

Bitcoin: Back to the Future

By November 17, 2017Blog

2009 - $0.07

It’s 2009. Swine flu has been declared a global pandemic, Somalian Pirates have kidnapped Captain Phillips and Michael Jackson has just died and the world looks devoid of hope and inspiration.

January sees the quiet release of a huge technical project detailing the methods for a peer-to-peer network for a system of electronic transactions without relying on trust. Its name was Bitcoin.

The first open source bitcoin client was released and the mining of the first ever block by Satoshi Nakamoto released 50 bitcoins to the creator of the blockchain. Later in the year the first ever Bitcoin Transaction was recorded in the public ledger and occurred when Satoshi sent 10 Bitcoin to a developer who was interested in the project from day 1.

Satoshi Nakamoto was a pseudonym for a creator whose identity remains unknown. Around in the early days of the project he mined over 1 million bitcoins which he’s yet to touch. With the current value hovering around $8,000 per coin they are one of the world’s richest people.

Bitcoin is decentralised and there is no body in charge of the currency, the Bitcoin Foundation is the closest you can get to an official body. There has been only 1 single flaw found in the security of bitcoin and this was patched and the errors erased. This error spotting is in the nature of the public bitcoin ledger.


2010 - $0.25

In 2010 mining coins was easy but their value was small 10,000 bitcoin was worth around $40 and an early member on the bitcointalk forum decided that he would buy 2 Pizza’s for BTC.

“I’ll pay 10,000 bitcoins for a couple of pizzas.. like maybe 2 large ones so I have some left over for the next day.  I like having left over pizza to nibble on later.  You can make the pizza yourself and bring it to my house or order it for me from a delivery place, but what I’m aiming for is getting food delivered in exchange for bitcoins where I don’t have to order or prepare it myself, kind of like ordering a ‘breakfast platter’ at a hotel or something, they just bring you something to eat and you’re happy!

I like things like onions, peppers, sausage, mushrooms, tomatoes, pepperoni, etc.. just standard stuff no weird fish topping or anything like that.  I also like regular cheese pizzas which may be cheaper to prepare or otherwise acquire.

If you’re interested please let me know and we can work out a deal.”

His reasoning was that he just wanted to say that he had paid for a Pizza in Bitcoins. This may not be the first ever bitcoin purchase but it’s probably the most famous. It showed the coin could be used as currency and purchases are key for mass adoption.

2011 - $4.14

In 2011 Ross Ulbricht under the Pseudonym “Dread Pirate Roberts” created a market place on the dark web for sales without regulations. The idea was that transactions would be kept anonymous with the only payments accepted in Bitcoin.

It became an eBay for Drugs with Silk Road banning the sale of:

“anything who’s purpose is to harm or defraud, such as stolen credit cards, assassinations, and weapons of mass destruction.”

Bitcoins are very hard to trace to a user, despite having a public ledger. The sellers had feedback, stores, ratings and customer service. Many believed it was a safer solution than risking your life at the hands of a local dealer.

Silk Road hit the mainstream when Gawker published this article in 2011 The Underground Website Where You Can Buy Any Drug Imaginable  where it described Silk Road as the Amazon for mind-altering Chemicals.

The site operated successfully for 3 years until the FBI shut it down in 2014, building an enthusiastic and thriving community. It may have been outside of the law but it provided a use for bitcoin and market for bitcoin which hasn’t been seen since.

Silk Road played at the fringes of society but showed the value of a currency that wasn’t regulated by government. It provided low cost transactions between parties across the world and protected those transactions from the snooping eyes of Big Brother.

2012 - $11.04

Whilst liberals managed to indulge in safe trading for black market drugs others were touting Bitcoin as currency in areas where services such as Paypal would not venture. It was a huge move when WordPress decided to accept Bitcoin in 2012. The world’s biggest blogging software decided that this currency would allow users in countries such as Haiti, Ethiopia and Kenya to pay for their software, where it may otherwise be impossible. This acceptance by WordPress laid the foundations for e-commerce ventures in Bitcoin.

2013 - $1,242

The value of bitcoin peaked in 2013 at over $1,242 per coin and many felt it had reached its Zenith. The growth came on the back of the US government backing the coin stating how it showed great promise. The discussion of the paper “Beyond Silk Road: Potential Risks, Threats, and Promises of Virtual Currencies” was genuinely positive and added validation many thought it needed. The US Financial Crimes division came to the conclusion that they did not want to “hinder innovation”.

Infastructure, Chinese investment, Halving & the notice of big banks saw transaction volume scale. Demand was picking up for the coin and the supply began to slow. It was a perfect storm for increasing the value of Bitcoin, but not as a currency, the rise in this period was as a financial asset.

2014 - $313.38

2014 was the year Bitcoin died. Well it wasn’t but that’s what many saw. The Coin had risen too far too fast and a market correction was incoming. The first set back was the Chinese Government banning financial institutions from using Bitcoin. It describes the currency as a novel invention and blocks trading in the currency, with many Bitcoin exchanges based in the far east volumes decreasing substantially, strangling the market. The exchanges looked to find way round the rules but were mainly unsuccessful. Mt. Gox was the major exchange still in existence after the Chinese ban and it came under intense pressure.

The exchange was struggling with massive DDoS attacks being launched against them. They had to stop withdrawal and it sent panic rippling through the markets. A run “on the banks” was almost inevitable as users scrambled to move their investments to a safer haven.  Unfortunately many users were unable to withdraw the funds they so desperately tried to do. Just 14 days later Mt. Gox closed, management disappeared with little comment under a huge cloud of anger and condemnation. A leaked internal document showed that over 744,000 Bitcoins had been lost.

The confidence in the coin was shakey and a trade worth $9 million for 30,000 bitcoin was placed late in 2014. The order was slowly filled and drove the market downwards. The Bear Whale was one of the first trades of this magnitude.

2015 - $397.52

Further arrests for money laundering, exchange hacks and the life sentence of Ross Ulbricht depressed the coin to its lowest value of the year to $226.90. The value of the coin was stuck in the doldrums during this period of it’s life until more positive news began to surface.

The EU declared that their should be no VAT on the exchange of Bitcoin and virtual currencies as they are not good or properties, but currency. The Economist posted a piece on Bitcoin days later highlighting the benefits of blockchain technology and promoted the idea of banks and government institutions implementing their own blockchains to improve transparency and safety for users. This type of promotion may not be at the heart of the decentralised currency, but it was positive press nonetheless. The currency is rebounding towards the end of 2015.

2016 - $1,050

In 2016 the currency continued to grow, more companies were accepting Bitcoin and the mainstream media was paying more attention. The public awareness began to increase at a huge rate and the increase of youtube channels, blogs and forums all contributed to taking a highly technical system and diluting it for the masses. The confidence in Bitcoin was increasing and the market was very resilient.

Bit Finex was hacked in 2016 and lost approximately $72 million. The market dropped 20% in a day. The belief in the currency was strong and 10 days later the Bitcoin price was just $3 less than prior to the hack. This resilience was highlighted once again in November when Donald Trump shocked the world as he ascended to the presidency. Global markets took a huge hit at the news with stocks and currencies being devalued. Many investors fled to perceived safe havens such as gold, many fled to Bitcoin.

This increase in trust and capital saw Bitcoin continue it’s upward trend, breaching $1,000 for the first time in 3 years over the Christmas Period.

2017 - $8,050

2017 saw the Hard Fork of Bitcoin to Bitcoin and Bitcoin Cash, with the development of the future at stake. This effectively doubled anyone’s holding in Bitcoin as both chains are now running side by side. Which will prevail, it’s hard to saw but there is room for more than one coin in this growing market.

Many have described Bitcoin has a bubble with the “greater fool theory” likely to blame. Cryptocurrency has become so mainstream that even Joe Bloggs must be considering an investment. Bitcoin is the Gold Rush of the 21st Century and it has the ability to make anyone a millionaire.

Reading Bitcoin forums will show many that Bitcoin is much closer to an investment than a currency at the moment, its substantial growth is due to people buying and holding their coins. You will see people screaming HOLD and TO THE MOON, but this attitude is creating a bubble that can pop and panic sells could see these holders lose all.

It’s not all doom and gloom for these asset speculators more and more financial institutions are looking for approval and a way to get in on the action. The greed of Wall Street is well documented and it’s unlikely they are going to let these gains be enjoyed by just the little man.

2018 - $100,000 ?

2018 is likely to be the year of large institutional investment in bitcoin and that will mean that demand greatly outweighs supply. Many People are speculating that $10,000 could be reached before the new-year. The end of next year could just as easily be $100,000.

Bitcoin needs its user to hold, spend and trade in the coin. There needs to be some inherent value the coin for it to maintain its rise, the dwindling supply will not be enough to keep the value propped up forever.

Silk Road showed there is a market for Bitcoin where purchases are illegal, but I propose that it will also be valuable for any purchases considered Taboo. There are a number of markets were Bitcoin spending should thrive.

Taboo industries are often ones you don’t want appearing on your bank account, many of you reading this will have a mortgage and will have provided bank statements for this purpose. Would you want your subscription to a porn channel, your payments to your betting account and a few choice legal drug purchases to show on this statement? Probably not.

The Sex, Gambling & Drug industries should be taking up Silk Road’s mantle in providing users with a discreet way to satisfy their darker needs. It’s a perfect combination of privacy and payment that solves a lot of problems for the user and the provider.

Gambling is a huge issue for many with countries often enforcing archaic prohibition on a form of entertainment. The industry is massive with Europe and the UK showing the economic power of the industry. Many users gamble illegally and must use low grade providers with little recourse should they be mistreated. Unable to use recognised providers they are seeking the drug dealers of the online betting world.

Pricing your products can be hard in a currency as volatile as bitcoin, but gambling is less effected by such swings if they trade entirely in BTC. This emerging market is large enough to offer value to bitcoin users and with lower fees than Fiat currency it can offer better odds & service than the current market leaders. Bitcoin has the potential to disrupt the betting market as a whole.

Many critics cite there been no real way to spend Bitcoin as a currency and they may be correct, but there are shoots growing with more companies willing to accept Bitcoin as a form of payment. Casinos are starting to accept anonymous players paying with Bitcoin and that could start the reigniting of Bitcoin as a currency.


Author bettingbitcoin

Bitcoin blogger and looking at the wider issues. Thoughts are my own. Support the blog: 32saUC798hAvoVNgSGLnRhQQ3pKdR7DMFC

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