A poker player could bring the global banking system to its knees
Its founder, Satoshi Nakamoto, mined the first bitcoin on 3 January 2009. The emergence of cryptocurrency brought the promise of freedom and a fairer future for some and, for others, a never-to-be-repeated opportunity to get rich. The source code for the Genesis Block, which was created when the Bitcoin network was launched, contains an apparent reference to the economic crisis that was raging at the time: the front page story in The Times that day is now an indelible part of cryptocurrency history.
Therefore, the creation of Bitcoin is usually traced back to the Great Depression. Still, if you dig a little deeper, you will find information that puts the creation of the revolutionary blockchain technology in a very different light.
Over the years, Satoshi has built up a cult following, and his legacy and forum posts are carefully preserved for posterity. Among the latter is a fragment of a program called "Bitcoin", published six months before the Bitcoin description was published. In the more than 1800 lines of source code, the term "poker" appears 72 times.
I wonder what Bitcoin has to do with poker? Is it possible that what we know today as Bitcoin was actually designed as a decentralized blockchain poker application that cannot be regulated, that no one in the world can shut down? Is the unbreakable global computer network forcing this? Like the global economy, the online poker industry was going through a difficult time. Its participants have experienced the damaging effects of decisions taken by incompetent authorities or lobbying interests. Had there been an alternative transaction system independent of the various governments and financial institutions? It would undoubtedly have been very popular in the golden age of poker.
Years before anyone had even written the word Bitcoin, and online poker exploded in popularity after an unknown player, Chris Moneymaker, won the 2003 World Poker Championship. Chris had never played in a live tournament before and won his $10 000 entry in a satellite (low buy-in tournament) at an online room, PokerStars. News of the win and the image of Moneymaker posing with the $2.5 million prize went viral, and everything changed from there.
Two years before the legendary win, the online poker market was an $82.7 million industry. Two years later, it was $2.4 billion. And that growth could have continued for a long time had it not been for the intervention of two US Congressmen who, in 2006, during a debate on shipping and port security, introduced and voted for a gambling bill, the UIGEA. The new rule was essentially passed without most MPs even having a chance to read it. From then on, financial institutions in the country were banned from handling transactions on gambling-related sites. Although the text did not specifically refer to poker rooms, the sector was in the grey zone even in the most optimistic interpretation.
Within a short period of time, several popular online rooms, such as the market leader PartyPoker, valued at $12 billion, left the US. As the company had been listed on the London Stock Exchange just the year before, continuing to serve US customers would have had severe legal consequences for them. Even so, the withdrawal did not come cheaply, with their shares plummeting 60% in the 24 hours following its announcement. And those who continued to service US clients were saddled with a considerable burden. From then on, paying players became a slow and painful process.
If Satoshi was an online poker player at the time, he would have experienced all these difficulties himself, which would eventually inspire the creation of Bitcoin. Lawmakers destroyed a booming industry in one fell swoop through the financial institutions that made the transfers, and the survivors were put under enormous pressure. The course of events could have been very different if there had been a censorship-resistant means of value transmission (such as Bitcoin).
Bitcoin was finally born, but in the meantime, the situation for online poker was becoming increasingly bleak. On 15 April 2011, Black Friday, the FBI made it impossible to access online poker rooms that still offered services in the US. Many people lost their entire poker bankrolls, and the incident shook confidence in the operators to the core. Some theorize that the UIGEA was designed to do just that. The former masters of the market, the traditional casinos, may have realized that they were behind in the race and used their connections and lobbying power to get rid of their online rivals.
Then, in 2012, the first cryptocurrency-based alternative, SealsWithClubs, was launched. The room handled both deposits and withdrawals exclusively in bitcoin, and, although it was not a huge success, it gradually became more popular with players. Poker pro Ed Moncada also played here:
"It was strange at first that it wasn't real money but something that existed in digital form, but when I first requested a withdrawal, I was shocked to find that the money was in my US bank account the next day, compared to the long waiting times of the time."
Moncada eventually became so fascinated that he founded a company based on it, and today he is one of the owners of Blockfolio, the most popular cryptocurrency mobile app.
In 2008, Russ Hamilton, who worked at Ultimate Bet, created a superuser account that made every card visible to him, making him millions of dollars in profit before he was exposed. And the owners of Full Tilt Poker shut down during Black Friday were found to have essentially run the room as a private ATM. An audit following the shutdown found that the bank account holding players' deposits had only $60 million dollars deposited instead of $390 million.
The above examples show that not only the authorities but also fraud by insiders can be a serious threat. But the blockchain technology behind Bitcoin can provide a solution: with the public, unbreakable program codes running on a global network, the transparent operation of random number generators that guarantee the purity of the game, and the handling of deposits and withdrawals can be fully automated and made secure.
The decentralization of blockchain poker, which the best rooms you can find on this useful site and other casino games could be the next step in the industry's evolution. Like banking, the current kings of online poker could bow their heads to the new technology. In 2018, the world's largest stock exchange, the ICE in New York, launched its bitcoin trading platform, BAKKT, in partnership with several global companies, while the world's biggest banks and fund managers will also compete to launch their own bitcoin and blockchain-based products.
Whether it was Satoshi's dream to reform banking or online poker, achieving the grandiose goals that seemed unattainable ten years ago are now within reach. And the reshuffled cards can be pulled out of the deck by anyone. It's up to the players to decide how they want to play them.