Sports Betting with Bitcoin (Part 2)
In our last article on cryptocurrency betting, we discussed some of the basics of getting involved in the digital currency as well as prospects for the future of blockchain technology. To recap some of our finer points, some of the advantages of using BTC for betting purposes include:
- No third-party oversight.
- No betting-related transaction fees.
- Speedy transaction completions.
These are just a few reasons to get involved with bitcoin sports betting. But if you happened to be one of the bazillion people who witnessed the crypto bloodbath this past month, chances are you’re wondering if BTC betting really is a good idea.
Well here’s the truth:
Speculative investing has caused cryptocurrencies, especially Bitcoin, to be an extremely volatile market. Due to its unregulated nature, the market has been fraught with scams, pump and dump schemes, and a whole host of other flagrant violations of the crypto spirit. After reaching a high of around 20K in mid-December 2017, the price of BTC plummeted 50%. It now hovers in value around 10-11K, and shows no signs of recovering to its previous high. Some are speculating that the Bitcoin bubble has popped and the game is over. Some are saying the value could drop to as low as 8K by the end of January.
But the reality of the situation is this:
- Bitcoin continues to be a long-term upward trend.
- Blockchain technology is here to stay, whether there’s a bubble or not.
Now you might be thinking, ‘why should I use a volatile alternative currency to fund my sports betting if the price-point is set to plummet even more? Well first of all, many of the biggest investment speculators are saying Bitcoin, despite its recent struggles, will rise above 50K this year. Whether that actually happens remains to be seen, and for those of you who are only in it to fund your bets, it might seem like too much of a gamble.
Well, take a look at this snippet from an article by TheMerkle.com dated February 22, 2017:
Bitcoin is a new currency and it is not at all as stable as fiat. It is prone to pretty large fluctuations and is seen by many as a gamble in itself. Serious volatility saw it go up to $942.06 on January 8, 2017, and then decline to $752.11 by January 11, a huge shift in just a few days. It is exposed to the vagaries of the global market. The fluctuations in January were caused by uncertainty over regulatory developments in the Chinese market, for instance. That $752.11 by January 11 was a drop of 40% on the recent high of $1,153.02 seen on January 5.
That was about a year ago. Since then, we watched Bitcoin rise to astronomic heights despite its seeming ups and downs. It seems everyone (specifically the amateur investors) are looking for the top and the bottom ceiling. After BTC reached 20K in December ’17, the increased media hype combined with a slew of speculative news articles on regulation in the Asian markets led to a price drop. Compare that to the 40% drop suffered last year around this time, it’s likely these woes are temporary bumps on the road to another exponential growth year.
That being said, with the market where it’s at now we’re likely to see another drop before the end of January. From there, many are predicting a climb back to December-level highs and above.
But Let’s Consider the Long Term!
The same people predicting that BTC will jump to 50-100K in 2018 are predicting the bubble to burst for good by the end of the year. Meaning, the value of BTC could fall to literal cents.
But what does this mean for the future of blockchain technology?
If there’s anything speculators can agree on, it’s that blockchain technology is here to stay whether the Bitcoin bubble pops or not. Just look at this snippet from a recent New York Times article titled, ‘Beyond the Bitcoin Bubble’:
The Bitcoin bubble may ultimately turn out to be a distraction from the true significance of the blockchain. The real promise of these new technologies, many of their evangelists believe, lies not in displacing our currencies but in replacing much of what we now think of as the internet, while at the same time returning the online world to a more decentralized and egalitarian system. If you believe the evangelists, the blockchain is the future. But it is also a way of getting back to the internet’s roots.
Every now and then there comes along a technology that contains the potential to transform our world forever. Take the Internet for example. Sure it underwent a massive speculative IPO bubble in the 90s. But even though the bubble popped, the Internet is still here.
Now, Blockchain contains the potential to revolutionize the web once more. How? Well, the roots of the internet were radically open and decentralized in relation to previous information technologies. Aside from government-funded projects, much of the early internet was dominated by hobbyists and amateur tech enthusiasts. Had society managed to stay true to those roots, the Internet would look drastically different:
The online world would not be dominated by a handful of information-age titans; our news platforms would be less vulnerable to manipulation and fraud; identity theft would be far less common; advertising dollars would be distributed across a wider range of media properties.
Because the Internet was so open and decentralized, a sort of power vacuum ensued in the early 2000s that led to the rise of social media as the most viable form of online identification and communication. Within a decade, Facebook had become the Gold Standard for centralized identity databases. The problem is, Facebook’s a singular corporation. It stores user information in a private database—hence concerns over the individual’s ownership of private information.
Fortunately, the first hint of a significant challenge to the closed-protocol era of the Internet arrived in 2008. A programmer (or group of programmers) going by the name Satoshi Nakamoto circulated a paper on a cryptography mailing list. The paper, called “Bitcoin: A Peer-to-Peer Electronic Cash System,” outlined a system for a digital currency that didn’t require a centralized trusted authority to verify transactions. At the time, it seemed like a hacker’s fantasy—an answer to a question that plagued organizations like The Silk Road, a site on the Dark Web that allowed users to buy large quantities of various drugs largely undetected. Obviously, that secret got out. But for more legitimate operations, the Bitcoin paper was a Book of Genesis of sorts—a foretelling of a world to come, a world that seems almost inevitable when you examine the nature of technological growth and development.
Sure, at the time Facebook and Bitcoin seemed to belong to completely different spheres — one was a booming venture-backed social-media start-up that let you share what was on your mind, and connect with like-minded friends, while the other was a byzantine scheme for cryptographic currency from an obscure email list. But 10 years later, the ideas put forth in Nakamoto’s paper now pose the most meaningful challenge to the monopoly of monoliths like Facebook.
The point of all this is, blockchain has the potential to once more deliver on the promise of free information and an open decentralized Internet. In two years we’ll be looking back on this period of speculative volatility for Bitcoin and other cryptos like Ethereum as we look back on the IPO bubble in the 90s—the bubble will pop but the technology will, likely, continue to evolve. With it, valuation will start to increase as blockchain tech moves sufficiently beyond the current crypto craze.
What Does It Mean For the Future of Crypto-Based Betting?
In any case, we say all this to reiterate the reality that sports betting via Bitcoin is and will continue to be an appealing option. Bettors looking to cut out the middle man, avoid banks, and hold their winnings securely would be wise to study the potentials of Blockchain technology.
To conclude, let’s take a look at a December 2017 Forbes article detailing a Sportsbook’s plans to develop their own altcoin.
As the question of legitimization becomes increasingly pressing, one company, a startup FansUnite is focused on creating a more an equitable, fair-priced model for bettors, with enhanced prospects of attaining long-term profitability, by reducing operator margins from as high as 5% to a flat 1% margin on all bets.
The company, FansUnite, says that it is able to provide this decrease in margins to bettors and maintain comfort in profitability due to the creation of its own digital currency as well as through building its own risk management platform around cutting-edge machine learning calculations currently only utilized by the most advanced betting syndicates…
FansUnite.com currently offers a free virtual currency, allowing users to place fantasy wagers with no monetary risk. However, in the near future, the company seeks to harness the power of the Ethereum blockchain. The concept is that users will be able to actually bet on sports as they would in traditional sportsbooks, but with FanUnite’s own digital currency. A typical bettor who wins 52% of the time at a sportsbook may end up losing money based on a sportsbook’s margins. FansUnite is seeking to change the game with their lower margins provided based on lower operating costs, allowing users an enhanced ability to actually profit from their bets.
As you can see, we are only in the infant stages of a massive technological revolution that has the potential to impact all levels of society—notably, the gambling industry. We’re heading towards that world much quicker than some of us realized. As such, we at Sports Analytics Simulator will continue to offer you information and advice pertaining to Bitcoin and other cryptocurrencies as the technology evolves and we move ever swiftly into this new and decentralized future.