jstrike

I always thought, if the day ever came when I was finished writing my software, then setting up the deposits and withdrawals would just take filling in a few forms, a couple hours of coding, few hours of legal work and we'd be ready to roll.

Whooaa was I wrong. It turns out that just being able to accept payments is the hardest part of the process. It's the part of the club you're not invited to, unless you're in bed with at least two governments and two banks, and a dozen lawyers, accountants, processors and intermediaries. See, three years ago when I started writing the software, that wasn't absolutely true. If you were incorporated in Costa Rica, you could get a CR bank account, sign up with a merchant bank, Neteller, Moneybookers, etc. and you could be up and running. You can't do that anymore.

For one thing, you can't land gambling revenues in CR anymore, not large amounts legitimately. There's nothing illegal about gambling from most of Europe on a site in CR, nothing illegal about running the site either. But the merchant banks don't want to deal with the chargeback risk or the Costa Rican banks. Who would? They want you to have a bank account in Europe, which you can only get if you get a license somewhere that's accepted by a European bank and by the EU, and the UK, and any other country you want to do business with, on an individual basis.

Suddenly the cost for opening a casino and taking transactions goes from being servers+staff+float to being servers+staff+float+licensing+bank introductions+two intermediate countries' worth of lawyers and accountants. So much for opening a poker site from my garage. No one gives a damn how nice the software is. Or how crappy it is, for that matter. It's just one "fuck you, pay me" after another, for services I shouldn't even need. More grease to grease the grease until there's nothing left.

So we're still struggling with that financial/government world, and trying to raise the cash we need to pay for all those services, just so we can have the privilege of being a tiny, tiny startup in the market. And keep in mind, integrity and morality have nothing to do with it. This is just about buying your way into the club. They don't care what you do once you're in there. All these hurdles don't keep rogues out...there are a million ways around them if you want to cheat and you're in bed with other cheaters who'll recode your transactions, funnel your funds through fake companies and all the rest. But if you want to stay honest, and try your hand as a small startup, you're screwed.

And then along comes Bitcoin. It's a relatively new concept, a peer-to-peer currency with no central bank, basically electronic cash that's untraceable, encrypted, and of a permanently limited supply, where supposedly only 21 million bitcoins can or will ever be created in the world.

It's also not too hard to build into an online casino, although no one legitimate has done it yet. I spent a few days last week building it into ours...it's our first working payment method, yayy!!! ....yes, if you're one of the three lucky testers on our site with the access to do it, you can deposit and withdraw bitcoins right now.

But nobody else can. Not now, and probably not ever. Here's the thing:

I've been spending time on the bitcoin forums, trying to figure out what these rabid fans of theirs are all about. Some of them are clearly nuts, driven by an ideological agenda about this currency that they say is going to revolutionize the world, topple governments and all that stuff. Hooray for them, but it doesn't really help if you just want to run a business with the stuff.

The rest of the people around there are basically speculators, who are trying to get rich quick by trading the heck out of this artificial currency. That's okay, I mean, at least there are people who are interested in it. The problem is that in the last two weeks, the currency went from 1BTC = $7 up to 1:$30, then crashed to 1:$12, and is now back to 1:$20 (haven't checked for the last few hours -- could have completely changed again by now).

So what happens if we let people deposit BTC? We get stuck with the coins. They go wildly up or wildly down while we're holding them in peoples' accounts. We're gambling on something we don't believe in...and then try turning them into real money. The only way you can extract them from the system is to go through one of a couple very-shady-looking exchanges, like mtgox.com, which limit you to $1000 per day or $10k per month in withdrawals -- not enough to run a casino and balance our players accounts in bitcoins against other accounts in dollars.

Now, it's true that there's a huge demand among this minority for a real Bitcoin casino. A couple people have set up trial-balloon sites, one guy has a little blackjack client, another one has a poker game in the browser (not much traffic). One individual who seems to have been active on their boards last year, and then totally disappeared, apparently set up a full-fledged RTG-ish knockoff skin, rigged all the games, and disappeared with a ton of bitcoins a couple weeks later.

So there's definitely some demand there for a legit casino to get involved, but I also suspect that a lot of it is just that they want it to look like legit businesses are backing their currency, so they can prove to themselves that they didn't just sink thousands of bucks into a BS-made-up-hot-air virtual bubble that you can't actually buy anything with. Psychologically, they need to show themselves that they can go play some blackjack with this junk they bought, although it's not clear what they'd do if they were up more than $1000 a day from that. But once they've shown themselves that they can do it, are they really gonna play much? The deadness of the only bitcoin poker site, with 12 tables open and one player online, suggests maybe it's all show and no go anyway.

On top of all this, about halfway through my coding our software to accept Bitcoin, two US Senators announced they're investigating its use in peer-to-peer drug deals through the mail. And then there's the simple fact that most Bitcoin users are in the US -- I mean, it's really taking off because the US has become so authoritarian and its citizens have become so paranoid and everybody's seen Glenn Beck going on and on about the imminent collapse of the dollar, and nobody can play online anymore. I feel sorry for them -- but we can't take US players or we'd be the ones in trouble. Bitcoin or any other currency. So we'd still have to screen everyone, and the anonymity of it doesn't do them much good.

No, the only great thing about Bitcoin is that our side of it is DONE. We can actually accept it on our site, right now, and start having games. After three hard years of work, I have a payment method. A payment method that puts us directly in the line of fire of the US Senate, that almost nobody can deposit in or out of, that fluctuates by 200,000% over two months, and that we can't do anything with if we actually accepted it.

Sweet.

The terrible thing is, after all the work and code and time and research I've put into it... it's hard to walk away. I have to deal with the fact that it's hot air... no matter how I play it out in my mind, Bitcoin can't work for us. And I have to let it go, and focus on what's real.