1. Bitcoin in the iGaming
Environment
Jon Matonis
Bitcoin Foundation

2. Overview
 Payments As Competitive Advantage
 Customer Service Challenges in iGaming
 The Story of Bitcoin
 Bitcoin Applied in iGaming Environment
 Regulation of Bitcoin
 Leading Bitcoin Gambling Sites
 Questions
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3. Payments As Competitive Advantage
 Established brands see no reason to change
 Smaller firms will drive innovation
 Provide the superior gaming experience
 Disrupt the status quo
 Use a global currency with 24x7 marketplace
 Take global market share from competitors
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4. Payments As Competitive Advantage
 Bitcoin is the ideal digital casino chip
 Immediate
 Irreversible
 Private
 Bitcoin has the ideal virtual currency attributes
 Nonpolitical unit of account
 Two-way convertibility
 Independent floating exchange rate
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5. Customer Service Challenges in iGaming
 Real-time payments in both directions
 Payment solutions that cover all countries
 Minimal fees for funds transfer
 Maintain client privacy beyond gaming environment
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6. The Story of Bitcoin
 Bitcoin is a decentralised electronic cash system using
peer-to-peer networking to enable irreversible payments
between parties without relying on intermediaries.
 Bitcoin is a reaction to 3 separate developments
 Centralised monetary authority
 Diminishing financial privacy
 Dominant legacy infrastructure
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7. The Story of Bitcoin
 Does the Cashless Society have to mean that we lose all of
the privacy attributes of physical cash?
 Anonymous
 Untraceable
 Bearer Nature
 We have arrived at the historic crossroads!
 User-defined privacy – or –
 Identity-based money
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8. The Story of Bitcoin
 What public key cryptography enables
 E-Money is not regular payments going online
 Concept of digital bearer instruments
 If you can click “forgot password” and have balances restored,
then it’s not a digital bearer instrument
 Centralised issuing mint schemes
 DigiCash (1990-1998)
 eCache (1999-2008)
 Voucher-Safe (2010-present)
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9. The Story of Bitcoin
 Launched in January 2009 by Satoshi Nakamoto
 Open source built on cryptographic primitives
 Elliptic Curve DSA and keypairs
 RPOW (reusable proof of work)
 SHA-256 Hash (incorporating distributed block chain)
 Solved the double spend problem without centralisation
 Dual role of payment system and unit of account
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10. The Story of Bitcoin
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11. The Story of Bitcoin
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12. The Story of Bitcoin
 Exchange Rate ~ 106.00 USD
 Size of Economy $1.2 billion
 Total Bitcoin Mined 11,271,950
 Maximum Potential Bitcoin 21,000,000
 Total Block Count 240,877
 Average Blocks per Hour 6.0
 Network Computational Power >100k
Ghash/s
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13. The Story of Bitcoin
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14. Bitcoin Applied in iGaming Environment
 Identity-based licensing drives decision
 Gamer identification is technically feasible
 Gamer identification is not technically feasible
 Risk management strategy
 Bitcoin (BTC) only games
 Bitcoin (BTC) converts to national currencies
 Implications for managing currency risk
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15. Bitcoin Applied in iGaming Environment (Gamers)
 Full Client Wallet
 Installs locally
 Downloads entire block chain
 User maintains private keys
 Lightweight Client Wallet
 Involves some level of trust in the server
 Downloads block headers only using Simple Payment
Verification
 User maintains private keys
 Browser-based Client Wallet
 Access via the browser
 Service provider downloads block chain
 Hosting server may or may not maintain private keys
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16. Bitcoin Applied in iGaming Environment (Operators)
 Extend acceptance to countries not reached by Visa,
MasterCard, and PayPal (60+)
 Provide payment method for the unbanked
 No disallowed merchant categories codes (MCCs)
 Not subject to payments embargo
 Eliminate chargeback and fraud risk
 Processing fees approaching zero
 Near immediacy of settlement
 Flexible merchant wallet solutions
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17. Bitcoin Applied in iGaming Environment
 WinPoker Becomes First Major Gambling Operator To
Adopt Bitcoin (Forbes, March 2013)
 Operates on the leading iPoker network
 Bitcoin is transfer method, not gaming currency
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18. Regulation of Bitcoin
 Decentralised nature inhibits third party shutdown
 Exchanges will be a focal point of government scrutiny
 Pressure on larger merchants
 Not regulated as legal tender (similar to air guitars)
 Only four jurisdictions have any official comment
 USA
 Australia
 Norway
 France
 ECB
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19. Regulation of Bitcoin
 United States (trading)
 Virtual currency exchanges defined by U.S. FinCEN
 Subject to AML/KYC guidelines
 Licensed as Money Services Business (federal)
 Licensed as Money Transmitters (states)
 United States (gaming)
 Virtual money gambling vs. real money gambling
 Definition hinges on closed gaming environment
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20. Leading Bitcoin Gambling Sites
 Satoshi Dice (now blocks U.S. players)
 bitZino
 Seals With Clubs
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21. SatoshiDice
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22. bitZino
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23. Seals With Clubs
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24. Thank You
“Digital cash is to legal tender
as BitTorrents are to copyrights”
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25. Twitter: jonmatonis
Email: matonis@hushmail.com
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Questions?