The Biggest Winners & Losers Of Bitcoin Gambling

Journalist:
June 28, 2016

Bitcoin gambling has increased over time. It represents an opportunity for players to make big money in the digital currency. The gambling space is one of the largest in Bitcoin.

Erik Vorhees, for instance, sold Satoshi Dice for $11.5 million in July 2013, which many experts cite as the first major Bitcoin business buyout.

John Bridge, MD at BitCapital, told CoinDesk his opinion of that sale:  “I presume it’s a significant existing gaming institute that’s bought it. If it has gone to one of the major players in the gaming industry and they’re looking to expand beyond the SatoshiDice model, that would be positive for bitcoin as it would give it greater exposure to people who don’t currently know about it.”

The sites are big money, and that means some have won – and lost – big sums by gambling online with bitcoin.

In 2013, one individual won 11,000 bitcoins on a Bitcoin gambling site, a sum of $1.3 million at that time. The man, known as Nakowa, sparked an Internet debate centered on whether or not he was a cheater, a genius or lucky.

One of the biggest gambling winners in history, he did not slow after winning the fortune and continued his betting on European-based Just-Dice.com.

Nakowa originally lost. On one hand, Just-Dice won 7,000 bitcoins, marking its largest win in site history. Soon, the Nakowa fortune would turn. By Monday, Just-Dice’s profit had been cancelled out, and the player handed the site a 2,000 bitcoins loss.

Founded in 2013, Just-Dice holds just a 1 percent edge and boasts a “provably fair” system so people could ensure the site wasn’t fraudulent.  Up until September 2014, when the site started using a different wallet, the Bitcoin wallet associated with Just-Dice had received 382,908.16002512 bitcoins.

To this day, no one is sure who Nakowa is. People were fascinated by his playing and watched him into December, when he lost 11,000 bitcoins. You can see some of his gambling below:

In July 2013, human error led that same site to lose 1,300 bitcoins when a player won many bitcoins and asked to withdraw them. Site administrator, who goes by ‘dooglus’, did this, but did not remove the balance from the user’s Just-Dice account. The gambler used these coins to gamble and lost. Just-Dice covered the loss.

As the Nakowa and Just-Dice example underscores, in online gambling – with bitcoin or not -there are winners and losers.

One Redditor introduced his Bitcoin gambling misfortunes: “This is a story of luck, hope, greed, despair, stupidity. Over the past 10 days I have gone one a rollercoaster ride of the full spectrum of human emotion. I am trying to live down what happened, and maybe this AMA will help me. I feel this can work both ways too, and I am grateful for any advice I receive. Hopefully also it will help you!”

The Redditor does not consider himself a gambler, but he managed to lose $500,000 gambling bitcoins and go $50,000 into debt.

“I know the house always wins,” he lamented in an AMA. “But after what happened, how quickly I got sucked in, how much money I made, and how it all ended just days later, I honestly do not feel that I was fully in control of my actions. If it happened to me, it can happen to you too, and I sincerely hope that after reading this, it never will.”

The Redditor claims to be a graduate student living in California. He entered the Bitcoin space for investment purposes. In late March 2013, he began playing blackjack and soon thereafter discovered bitZino.

He started playing for small stakes to learn strategy. He lost about $4,000 before switching to roulette. With the price of bitcoin increasing above $100 for the first time, the Redditor kept playing. Soon, he was betting “big money.” By April 10, he had made nearly $500,000.

“It was Bitcoin, but it was one click away from being in my bank account: this was real money,” he wrote.

The crash began, and he kept playing. All profits lost on the same day, he turned to his student tuition loan. He lost it all.

“My fiancee knew I was upset, and I owned up that I lost a lot of money,” he wrote. “I said it was due to the crash…She could see the charts so she believed me, but she does not know that I lost every single cent. Lies, but I felt that I did what I had to do (her dad had a major gambling and alcohol problem, so I really could not break her heart like that.)”

The Redditors were largely supportive:

These are two rather extreme examples. Others have won – or lost – bigger and smaller sums. One individual had luck in an NFL fantasy league. As the gambler detailed:

The oddsmakers know more about NFL and the matchups than I do so the odds for each game and the superbowl winner tell me all I need to know about each game and the value of keeping teams available for future weeks. I will bet on favorites but not necessarily the shortest priced favorite every week because if the shortest priced favorite is one of the top teams in the league it might be better to keep that team available to pick later in the season.

Each week I will identify a handful of favorites that are around the same odds and pick the one that is least valuable to hang on to as a pick for later. This pick has the same chance of winning this week as the better teams and I lose less equity by losing that team as an available pick in the future.

He won just over 40 bitcoins. Around the same time, however, he had lost 18 on the above-mentioned Just-Dice.

Images from Shutterstock and Imgur.

Last modified (UTC): June 28, 2016 11:14