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Binary options, Gambling, and the Future of Betting with Bitcoin

Matthew Branton in Bitcoin Gambling published on 10, September 2014

Bitcoin Binary Options

Let’s make a bet, just between you and I. Within two years you will be able to wager on anything, instantly, in the comfort of your own home, or right on that smart-phone wherever you are. The gambling world will become effortless, frictionless, and unstoppable. This isn’t Satoshi dice. It’s a new world where gambling is integrated into every type of game, every service, every message. Where betting is absolutely pervasive.

You see, we bet every day. Life is a series of chances, we bet on our jobs, we bet on each other, and we bet on our own abilities. Ultimately we take stakes in outcomes, and if all goes right we reap the rewards. The stock market is probably the most efficient gambling machine created in the history of the world, bubbling with esoteric contracts, and derivative instruments. All of which are fancy ways of betting on future outcomes. This is the main foundation of brands like Stockbet. Trader sounds a lot more respectable than Gambler in some circles, but the overlap in skills and motivation is undeniable.

Stock MarketSomewhere along the line the binary option was born, an exotic contract designed to be integrated into more complex arrangements. That makes it sound complicated, but it’s really very simple. A binary option is a true or false bet on a future occurrence in a specified time frame. Most Bitcoin binary options trading sites operate this. Brands like BTCLevels and Anyoption, as well as binary options Beast Options broker, are just a couple of examples. The Yankees are going to win today’s game. Russia is going to withdraw from Ukraine within 2 weeks. Fancy prancer will get second place in the race. The thing is, almost anything can be composed into a binary option. It is without any sugar coating an unregulated bet that you can programmatically structure. If you buy the option and the event occurs you are in the money, and if it doesn’t you’re in the red.

StorjWe already have betting platforms that take Bitcoin, but the binary option will transform the network into the platform. Just like StorJ promises to create a new distributed storage network, next-generation blockchain tech and front end clients will offer access to real-time betting in a fully decentralized and unregulated way. Technology like Counterparty which offers peer-to-peer bets is changing the way we build software, and opening up new possibilities. Adoption is limited, but as the user experience improves we can expect to see it integrated into specific games and applications. The fundamental building blocks of this new gambling-tech are being put into place as I write this.

Alternative digital currency networks such as Ethereum promise to push gambling tech even further. Creating systems that for all intents and purposes are self-sustaining and completely unstoppable. The service itself will live on the network, taking bets, and distributing winnings. Independent from any entity or government, and continually taking wagers from people and devices on a variety of subjects and events. This type of technology and the myriad possibilities it creates is right around the corner. Given how closely trading and gambling are related, how long until the mechanics of the stock market are perfectly mirrored?

I give it two years. We have the know-how. The motivation exists, and the possibilities are endless. Real time distributed, crowd-sourced betting is here to stay and that technology is going to filter into all aspects of our digital lives. Care to bet otherwise?

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