If only 50% of all bitcoins associated with Satoshi Dice were cashed out for fiat currencies, it would account for a staggering 2.2 million BTC, or $1.5 billion at today’s bitcoin market price on Coinsetter.
Like it or not, there appears to be at least one industry that is moving bitcoin network transaction volume: online gambling. According to Coinsetter research, on average, almost one out of every five transactions that has taken place over the 5 year history of bitcoin has been associated with online gambling. To be more specific, 19.2% of all transactions are outputs from addresses belonging to major bitcoin gambling businesses. To many this is no surprise, as gambling has been a major facet of the bitcoin economy and a driver of liquidity on exchanges for years. A look into the static bitcoin addresses owned by Satoshi Dice, a blockchain-based gambling service founded in April of 2012, reveal that over 4.3 million BTC have been received by Satoshi Dice from players eager to test their luck. This, along with other data gathered from blockchain transactions, indicate that their 1.9% house edge has generated over 82,000 BTC in revenue. While this volume is dominating on a pure number of transactions basis, we will note that it is only a small part of bitcoin transaction volume by value (approximately 1.75%).
Bitcoin gambling not only rewards those who were able to set up services and businesses to capitalize on it directly but also those who indirectly benefit from the increased demand for bitcoin that it generates. This group includes exchanges, brokerage services and every bitcoin holder. A popular mantra amongst frequent gamblers is, “you haven’t made money until you cash out.” If only 50% of all bitcoins associated with Satoshi Dice were cashed out for fiat currencies, it would account for a staggering 2.2 million BTC, or $1.5 billion at today’s bitcoin market price on Coinsetter. With companies like Bitmarkers bringing bitcoin gambling to real world casinos and The D in Las Vegas announcing the acceptance of bitcoin as a payment option at its front desks, gambling seems well positioned to continue driving growth in bitcoin network transaction volume. We encourage those following bitcoin price movements to track this segment of the industry.
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