For a little context, here’s a snippet culled off irc :
Bugpowder Well… I’m just posting a rolling update for this morning’s action. Betting pace is around 10BTC / s.
mircea_popescu Oy vey.
Bugpowder Shit. +300. I have to stop looking. It’s like 2000 BTC a minute swings.
mircea_popescu Lol fascinating is it.
Bugpowder Yes it’s like I’M betting! Also fascinating, who is doing this?
mircea_popescu Srsly. Chinese ppl ? I have no idea. Can the addies be traced at all to anything ? Single entity ? Wide diversity ? Something in between ?
Bugpowder I wish we could trace them.
mircea_popescu Isn’t something like taint analysis usable in principle to do it ? You’re the research scientist cum brain surgeon, do something.
Bugpowder You know more about bitcoin and network analysis than me. Not a happy account graph :)
mircea_popescu So basically someone bought 200k worth of btc and bet it all ?
Bugpowder They are all going to be traced back to evorhees.
mircea_popescu O ?
Bugpowder Just recycling the profits to boost the traffic. This is my new theory heheh.
mircea_popescu I tell you what, if you can prove that one you’re the new bitcoin star. You can even be my forum pr. Even tho you’re not a girl.
Also from the man himself (privately) :
Not sure who this/these big betters are, but I’d love to know also! I’d love to know who is betting so much, and why.
So now, here’s the thing : SatoshiDICE (aka S.DICE) is doing something to the tune of half a million BTC in monthly turnover. There’s one hour intervals when people bet over ten thousand Bitcoins, and these occur with more than weekly frequency. The site’s rake for the current month is a whopping 20`000 BTC, which makes it the most profitable Bitcoin venture of all timei and by a comfortable margin at that.
All this phenomenal success of course begs a bunch of questions, chief among them “who are these people!” (which isn’t technically a question as much as a sort of English drawn out oy vey, but still, let’s pretend it functions like one) and also “how do we know it’s not the site doing it itself ?”.
This latter one is particularly problematic because of the very nature of Bitcoin itself. You really want an anonymous currency ? Well guess what, that necessarily means you can’t do business. You can’t do insurance in BTC, currently, for the simple reason that you have no practical way of knowing the insured isn’t betting against himself (which could eventually end up with the dreadful scenario of him making more money by failing than by succeeding).
Fortunately Satoshi was at least an inkling wiser than the large troop of monkeys populating the BTC forums and imagining they’re constituting “the community” on the strength of their ignominious absence from the WoT, their flat inability to use PGP in any implementation and their collected assets of almost twenty whole Bitcoins if we count all the wallets they’ve meanwhile accidentally lost. Consequently, Bitcoin is not anonymous. It’s pseudonymous, which is quite a different thing altogether.
It may or may not be possible to establish whether there’s any truth to that suspicion (or indeed that there’s no truth to that suspicion) through clever traversal of the public transaction ledger known as the blockchain. Unfortunately, in spite of what my generous friend declares I’m not much of a Bitcoin guru myself. I have a working but basic understanding of what it is and how it works, but I’m by no means in a position to be the one doing this. I am after all finance, not tech, in this rudimentary and recent division of labour that we’ve got going in this yet tiny corner of the virtual space.ii
Still, there’s no reason my limitations would have to be yours. Quite the contrary, let’s use my advantages to your advantage and vice-versa. I am hereby offering one 100 BTC reward to anyone who presents conclusive proof that either : a) the site is betting with itself or b) the site is not betting with itself. I am further offering three 10 BTC rewards to anyone that I deem has done significant service towards such conclusive proofiii.
Let the traversals begin!
And yes, I am pretty certain that the most important question we have before us in 2013 is something of this nature. I think this type of questions, logically legitimate as they may be, are one of the main drags to business development in BTC at the present time. If we manage to somehow find an answer, irrespective of what it spells out in the case at hand we will not only have made one step further on the road of actually being a community, but more importantly we’ll be much better equipped to handle a much larger future, which means quite simply that the much larger future will become present, and consequently all these current tiny market caps a thing of the past.
Oh, you don’t think hundreds of thousands of BTC is tiny ? Well… I guess you’re not in finance.
UPDATE Erik Voorhees commented to add that if anyone comes up with some way he can prove he’s not doing it he’ll split the reward.
LATER UPDATE As S.DICE has been a privately held concern for a while now, this reward is no longer offered.———
- A status quite a lot more meaningful in BTC than any fiat for the reason that BTC has no inflation to gradually wash everything out, and ensure that the Beatles or Elvis Presley will eventually be surpassed in sales by people who never could even dream of playing in their league simply through dilution of what a dollar is. Consequently, the most profitable business of all time in Bitcoin will likely be set early, and definitively. This may very well be it. [↩]
- And for that matter I’m pretty sure Greifeld didn’t comprehend exactly what brought their system shamefully and painfully to its knees on the occasion of the FB listing. I’m mentioning this mostly to remind everyone that while we’re very harsh - and rightly so! - on BTC site operators (and I am possibly harshest of all), our fiat counterparts are ordinarily doing a much worse job of it, on all scores. It’s just that it’s such a lame comparison, someone in BTC saying they’re doing poorly but better than the pretend-banks, pretend-stock exchanghes and what have you in fiat is much akin to an able bodied kid delighting in having surpassed a paraplegic octogenarian on the Olympic track. Well, so he has, and what of it ? [↩]
- Principally for but not limited to theoretical advances in the field, and also for practically usable tools that’d allow such proof be obtained in an arbitrary situation. [↩]