Why Are Poker Players Obsessed with Bitcoin?
Bitcoin continues to intrigue people from all walks of life. Everybody from teachers to doctors have a vested interest in Bitcoin’s value.
But if there’s one profession that seems more into this cryptocurrency than any other, it’s poker pros.
I kick myself for not getting into Bitcoin when I first heard other poker players discussing it in 2013. This virtual currency’s value has increased by approximately 40x since then.
What gave poker pros the foresight to purchase Bitcoin and other cryptocurrencies before others? And why do they continue to be at the forefront of crypto investing?
I’m going to discuss the different reasons why poker players have become so into Bitcoin. But first, let’s cover the basics of this cryptocurrency.
What Is Bitcoin?
Bitcoin is a digital currency that’s used to make peer-to-peer transactions. No middleman is needed to regulate Bitcoin, because its transactions are recorded on a public ledger known as the blockchain.
Bitcoin is often referred to as a cryptocurrency, meaning it features encryption technology to regulate the generation of currency units and to verify transactions.
Due to the lack of third-party involvement, Bitcoin operates separately from financial institutions and isn’t controlled by a central government.
Users put their Bitcoin in digital wallets, which are used to store and send this cryptocurrency. A wallet is kept safe through a password and private key, which is a long character string that’s nearly impossible to crack.
A Bitcoin is broken down into smaller units so that it’s easier to use for transactions and services. Here are the different units:
- Bitcoin (BTC) = 1
- deciBitcoin (dBTC) = 0.1
- centiBitcoin (cBTC) = 0.01
- milliBitcoin (mBTC) = 0.001
- microBitcoin (uBTC) = 0.000001
- Finney = 0.0000001
- Satoshi= 0.00000001
A milliBitcoin is especially important to online poker players and other gamblers.
Bitcoin poker rooms use mBTC as the value of chips, because this relates closely to a US dollar. An mBTC is currently worth $7.43 at the time of this post.
Of course, most poker players don’t risk this much per bet. Poker sites adjust for this by listing wagers as decimals of a milliBitcoin, such as 0.3 mBTC.
How Did Poker Players Become Bitcoin Visionaries?
Did poker players start purchasing Bitcoin because they’re financial wizards who can see into the future?
Not exactly. Instead, many players were lead to BTC through legal occurrences in the online poker industry.
To explain this, I need to go back to 2006, when President George W. Bush signed the Unlawful Internet Gambling Enforcement Act (UIGEA) into effect.
The UIGEA doesn’t ban any form of online gambling. But it does call on American Financial institutions to avoid approving unregulated gambling transactions.
Many online poker rooms had difficulty serving Americans with the UIGEA in place. But some sites found ways around this law by using sketchy payment processors and disguising transactions.
Full Tilt Poker, for example, disguised player deposits and withdrawals as sales for golf equipment and jewelry. The US Department of Justice (DoJ) eventually caught on to what was happening and cracked down on Full Tilt, PokerStars, and the CEREUS Network (UB & Absolute Poker).
Dubbed “Black Friday,” this operation saw the US District Court for the Southern District of New York indict 11 individuals who were associated with these sites and related payment processors.
Black Friday (April 15, 2011) caused the CEREUS Network to shut down. Full Tilt struggled to the point where they lost their Alderney license and were on the brink of extinction.
PokerStars worked out a deal with the DoJ, whereby they paid $731 million to avoid admitting any wrongdoing and acquire Full Tilt. Stars also agreed to exit the US market.
With major poker sites no longer serving Americans, US online players began searching for ways to continue enjoying the game they loved.
Many serious professionals moved to other countries like Canada, Costa Rica, Malta, Mexico, and Thailand. Others grinded in smaller cash games and tournaments offered by the few remaining US-facing sites.
SealsWithClubs (SwC) helped changed the US internet poker scene when it launched in 2012. SwC became the first poker site to make Bitcoin their primary banking option.
Satoshi Nakamoto — the alias for one or more Bitcoin inventor(s) — launched BTC in 2009 as an alternative to fiat. Nakamoto’s vision was to decentralize currencies following the 2008 American financial crisis.
After all, neither the US nor any other federal government can control Bitcoin.
American internet poker players began using BTC so that they could play at these sites. Therefore, they walked into Bitcoin ahead of the first boom in November 2013.
Not all US players got into BTC this early. But the American online poker situation set the foundation for more players to purchase it.
Why Poker Players Continue to Love Bitcoin
The obvious reason why poker players remain committed to BTC is because it’s a must at US-facing sites. Plenty of internet poker rooms still use Bitcoin to evade the UIGEA.
Another no-brainer reason is that players have made a great deal of money just from holding Bitcoin during price increases. This graph shows that BTC has had a number of peaks and valleys, including two big spikes in November 2013 and December 2017.
Any poker player who was holding Bitcoin and other cryptocurrencies during these periods saw a large return on their investment/bankroll.
Here are some other reasons why poker pros continue to enjoy BTC:
- Poker players are comfortable with risk — Bitcoin takes users through many highs and lows. Rounders are used to dealing with this variance.
- Bitcoin still has potential — The value of crypto has increased ever since its invention in 2009. This is despite the fact that BTC has yet to achieve mass adoption.
- BTC is fairly anonymous — Anybody who wants to keep their poker activities a secret can rely on Bitcoin due to its mostly anonymous nature.
- Fees are low — Bitcoin is one of the better online poker banking options from the perspective of withdrawal fees.
Bitcoin Has Made Some Poker Players Rich(er)
Considering that internet poker players have been using Bitcoin since 2012, it’s no surprise that some of them have made a lot of money through it.
Most poker players aren’t publicly offering exactly how much they’ve earned through Bitcoin. But many pros are willing to discuss the fact that they do hold some BTC.
This interview shows Fernando “JNandez87” Habegger, Ryan Riess, and Dietrich Fast discussing how they’ve done well with crypto. Fast actually offers that he has around 750 Bitcoin, which is worth over $5.5 million at the time of this writing.
High stakes poker pro and Instagram sensation Dan Bilzerian discussed how he bought Bitcoin in early 2017 for $2,300 apiece. BTC has increased by around 3x since Bilzerian purchased a “shitload” of it.
Doug Polk is the posterchild for poker pros who’ve turned to Bitcoin for wealth. Polk started buying it and other cryptocurrencies a few years ago.
Besides investing in Bitcoin, Polk also runs his “Doug Polk Crypto” YouTube channel, which has amassed over 200,000 followers in less than a year’s time.
Haralabos Voulgaris, a poker player and famed sports bettor, is another early Bitcoin investor. While it’s unclear how much BTC he owns, Voulgaris’ Twitter feed shows that he’s very adamant about the matter.
Why Doesn’t Everybody Have Bitcoin?
Based on the success that poker players and others have had with cryptocurrencies, it’s a wonder why more people are jumping onboard this trend. Of course, there are still some major concerns regarding Bitcoin and its future.
The number one problem is that cryptocurrencies in general are lightly used across the globe. While Bitcoin has managed to slowly become integrated into a number of businesses, it still has yet to achieve mass adoption.
Other crypto that revolves around niches like supply chain management, privacy coins, storage, and passive income have yet to take off as well. It’s difficult for people to pour money into cryptocurrencies when there’s such a low acceptance rate right now.
Another problem is the heavy competition in the cryptosphere. Bitcoin remains the king of cryptocurrencies since it commands around 40% of the market cap.
Cryptocurrencies aren’t user friendly at this point either. The general public doesn’t want to purchase Bitcoin from the fiat exchange, create a wallet, and store private keys just to get started.
Perhaps the ease of use will improve in the near future. But using a credit card, eWallet, or prepaid card is currently much easier for the average person.
Bitcoin is also risky from the perspective that users can be hacked or send their coins to the wrong address.
Beginning with hacking, people take considerable risk when they leave BTC on a poker site or exchange. We need only look at the 2014 Mt. Gox hack (850k Bitcoins gone) as evidence of what can go wrong.
Some users have made blunders where they send cryptocurrencies to the wrong wallet address. This is a huge problem when considering that the coins are essentially lost unless the mistaken recipient sends them back.
One more problem is the processing times with Bitcoin. While the network moves quickly when traffic is low, it comes to a screeching halt when a large number of users are trading Bitcoin back and forth.
This problem reared its ugly head in December 2017 and early 2018, when countless people joined the cryptocurrency craze.
The Future of Bitcoin in Poker and Beyond
I just highlighted several problems that plague Bitcoin and prevent it from becoming the world’s preferred currency. But this isn’t to say that BTC can’t rise to become a serious rival to credit cards, eWallets, and other payment methods.
Bitcoin has already proven to be a solid banking option at poker and casinos sites. Many other gaming sites have jumped on the bandwagon to support this virtual currency.
Poker players from grey markets like the US appreciate the fact that they can still play the game they love with BTC. Until more American states regulate internet poker, Bitcoin will continue to be used in the online realm.
Certain internet casinos are starting to accept more cryptocurrencies as baking options. Some of the crypto that has found success in online gaming include Ethereum, Ripple, Bitcoin Cash, NEO, Monero, and ZCash.
These cryptocurrencies are used through what’s called provably fair gaming, which allows gamblers to verify that every bet is indeed random. This negates the need for a third-party testing lab to ensure that online poker and casino games are fair.
It certainly looks like Bitcoin and other crypto have found a comfortable place in online gaming. But their true future will be defined by how they’re accepted by the general public.
I’ve mentioned repeatedly that Bitcoin has yet to become a real rival to established payment options. The average person is far more comfortable using a credit card than going through the hassle of paying for goods and services with cryptocurrency.
The key thing to remember, though, is that Bitcoin is only a decade old.
The most-exciting aspect about Bitcoin is that it’s a decentralized currency. The fact that governments and banks can’t control it means that BTC can still be used to play online poker in grey markets.
This decentralization factor is what led many poker players to Bitcoin in the first place. Some of these same players have made a fortune just by holding BTC.
Considering how many rounders have done well with Bitcoin, you can be sure that plenty more will continue following suit and investing in this currency.
Whether they too become rich all depends upon the growing confidence in cryptocurrencies. If history is any indication, then we can expect Bitcoin to keep increasing in price.
Regardless, if crypto continues being a profitable investment; it can at least count on a poker community that has embraced fiat alternatives. Many players are just happy that Bitcoin allows them to play internet poker in the face of the UIGEA and other restrictive laws worldwide.