The Bitcoin world has been shaken up this morning with the acquisition of SatoshiDice, an online casino that deals exclusively in the cryptocurrency. Not only does the deal represent the first major acquisition of a company whose business is built almost entirely on Bitcoin, but the transaction must also represent one of the largest in Bitcoin’s history – SatoshiDice was snapped up for 126,315 BTC, around $11.5 million in ‘normal’ money, according to CoinDesk, which added that the name of the buyer hasn’t been disclosed.
So what is SatoshiDice all about, and why is it so valuable? It’s nothing to be compared with big betting sites like Bet365, with its only game being a ‘lucky dice game’. Nevertheless, the game is dead simple to play – simply choose your number, pay your Bitcoins, and then the “Ghost of Satoshi” rolls the dice – if your number is lower than the digit that’s rolled, you win!
Okay so it sounds pretty childish, and more likely you’ll end up losing more than you ever win, but the game’s proven to be addictive nonetheless, with over 5.3 million bets placed so far, and 3.9 million wins paid out. Part of the addictiveness might be the speed in which the winnings are doled out – just 30 seconds, according to the company, which charges a small transaction for each bet that’s been placed.
According to MPEX, a Bitcoin securities exchange based in Romania, the price of the deal represents a 175% valuation on SatoshiDice’s value.
Erik Voorhees, founder of SatoshiDice, made the following post on BitcoinTalk, addressing concerns any shareholders may have:
“While I know some S.DICE owners intended to hold for a long time, and will thus be dismayed by the buyout, it is my sincere hope that this compensation level will be amenable. It is substantially higher than the contract mandates, and it is almost 3x higher than all private owners are being paid. It has not been easy to negotiate to this level, but I believe it is the right thing to do.”
Perhaps more important than the value of this acquisition is what the deal represents – as the first major buyout of a business that revolves solely around the cryptocurrency, it underscores just how much money is circulating in its economy, and the potential revenues to be made.
Gambling especially, has been a money-spinner for eons, yet in many countries – such as Thailand, where I live, and the US, which forbids businesses from taking money for online gambling – it’s also illegal and very difficult to fund gambling sites. Therefore, given the anonymous nature of Bitcoin, many see the currency as the perfect way for players in these countries to circumvent local laws. We should note however that last May, SatoshiDice blocked anyone with a US IP addresses from accessing its site after taking legal advice.