The positive market effects of the delivery bet.

Duminica, 25 August, Anul 5 d.Tr. | Autor: Mircea Popescu

Talk is cheap, epistola non erubescit and on the Internet nobody knows you're a dog. This state of affairs may be well and good for most applications, but when you're trying to invest your Bitcoin it all suddenly becomes very problematic.

People will say anything. They will say anything with all the forcefulness of truth and with all the gall of unwavering conviction irrespective of whether what they say is true or false. Consider the illuminating case of the primeasic scam :

primeasic-scam

Bold claims ? Check. Supposed "business" ? Check. Spurious "we" and "our" everyhwere ? Check. So called "proof", including doctored images ? Check. User came straight out of nowhere, no history, no connections ? Check. Forum donator ? Check.

His only mistake was including factually verifiable elements, which were promptly verified - that same day kakobrekla was driving towards the supposed location, where he predictably found nothing at all. The guy stopped answering on the cell the next day, and then cue the usual damage control, "you can never be sure of anything" bullshit and well... life goes on. No primeasic.

Scammers today have learned from his lesson, and they carefully but very efficiently eschew the inclusion of any verifiable elements at all. So what can you do, right ? You have to take a chance, right ?

Wrong. I'll tell you what you can do : ask the supposed ASIC manufacturer how much he's put on his supposed delivery. Because all this year we've had a wonderful tool to cut down on fake ASIC production scamming, and that tool's BitBet.

BitBet has cost the BFL scammers over 500 BTC on account of their March delivery bet. That's all Bitcoin that went to ease the loss of people who naively believed them.i BitBet has cost Bitfury over 100 BTC on its delivery bet. (Interestingly enough, unlike the BFL/Bitcoin Foundation group of scammers, that have been spending their time ever since then trying to badmouth everyone involved in the failure of their little scheme, and often people completely unrelatedii, Bitfury simply sent a note informing us of their failure a few hours in advance and that's that - they have a new delivery bet active.)

So now - is there some ASIC chip / miner manufacturer you intend to send Bitcoin to, either for products or as an investment ? There's a very simple question you need an answer to : how much have they put down on their delivery bet ?

Delivery bets are not usually accepted unless the interested party itself creates what's known as a zeroconfiii. In either case you can virtually verify the respective party's exposure on the Yes side : they can trivially sign a message with the sending address, and BitBet addresses are public.

Seeing how it's extremely unlikely nobody would take the No sideiv, it makes absolutely no sense for the purported company to eschew placing a bet on Yes : if they really believe themselves then it's all free Bitcoin. The problems start when they know that no matter what happens, they won't deliver. That's the only situation where it makes no sense to put anything whatsoever on Yes : when there's no chance in Hell. When they know they're a scam then any bet they make'd be giving Bitcoin away.v

That's the tool, that's how you distinguish scammers from legitimate businesses. Use it.

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  1. It is worth noting that at the time BFL was running a confidence scam on the side, by having a similar bet on an older and meanwhile defunct betting site. Once they failed to deliver anything that scamsite "pushed" the bet, which is to say gave BFL its Bitcoin back. This was a planned exercise, supposed to deliver two different payoffs : on one hand directly, the appearance of credibility "guaranteed" by a hollow bet ; on the other hand indirectly, the maring of the insurance bet as "not working".

    Fortunately for everyone actually involved in Bitcoin and much to the ire of notorious malfeasants such as Luke-jr or gmaxwell, BitBet didn't play along and so that well planned dishonestly failed to deliver on the second count. Because of that admin's honesty and courage, telling supposed "important people" and their scammy Bitcoin Foundation to take a hike we have today a cheap and very effective way to hamper scammers, hopefully to the point of making their efforts economically unfeasible. []

  2. See the amusing case of the anti-Satoshi Dice campaign and the magnificent way that backfired. []
  3. Bitcoin bet at the time the bet is introduced. []
  4. Indeed in all cases so far the No side collected more Bitcoin than the Yes side. []
  5. Which, incidentally, some will, so consider exactly how much they're risking and how much they're collecting, it matters. []
Rubrica: S.BBET
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One Response

  1. [...] of the bet only to lose under circumstances such that they must have known they were going to lose. There is a solid write up on Trilema of positive market effects related to delivery bets, so I’ll leave those to Trilema to [...]

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