Bitcoin is a decentralized p2p currency that has blowing up this year. Read a detailed description
here.
Poker sites could, with very little effort, allow nearly instant bitcoin withdrawals without having to deal with the volatility of holding onto a bunch of bitcoins. The process would be pretty simple:
- Deposit USD onto the mt gox exchange
- Instantly buy bitcoins and send them to the players bitcoin address using the mt gox API when a cashout is requested. The coding for this is pretty simple – basically something like BUY [cashout amount], SEND TO [player bitcoin address]. The fee is only 0.65% to buy bitcoins.
- Player receives bitcoins in wallet, which takes about 10 minutes to be confirmed.
At this point the player has complete control over the money that was just on the poker site minutes earlier. Once you have bitcoins you can use them to buy goods or services that people are selling in bitcoins. You could have someone buy something from amazon for you for a small fee, for example. You could also sell the bitcoins on an exchange for a small fee (0.65% or less) for USD then cash out using one of the available methods. These methods are much better than waiting 2 months for a check, look at tradehill’s
withdrawal options.
Here is an example of how you could turn poker site money into USD in your bank account as efficiently as possible using bitcoins:
- Request cashout
- Cashout shows up in bitcoin wallet in 10 mins
- Deposit onto mt gox, wait about an hour to have enough confirmations on your deposit so that you can sell.
- Sell bitcoins for USD @ 0.65% fee
- Transfer bitcoins to dwolla ewallet for 0.25$ fee, which shouldn’t take more than a few hours
- Free ACH withdrawal from dwolla to bank account (2-3 days).
In this example you are only exposed to about an hour of risk in holding bitcoins and having to deal with the fluctuations of the currency. The probability of losing any meaningful amount of money in that hour is very low.
A problem is that there is probably not enough liquidty on mt gox to deal with huge cashout amounts. Sites would probably have to place weekly bitcoin cashout limits, depending on how much interest there is in them.
There is also the possibility that mt gox doesn’t want poker sites using them to send bitcoin cashouts to players. However, I don’t think it would be too hard for sites to find ways to get around this. WU probably doesn’t want to facilitate poker cashouts either, but they still find a way. The anonymous and virtual nature of bitcoins will make this much easier.
Obviously if you think bitcoins are worthless/fake/scam/whatever you can just ignore the option and wait 3 months for a check.
Any of the poker site representatives want to comment on this? I think everyone should email the US poker sites asking for bitcoins as a withdrawl option. There is little risk for the players/sites and the potentially huge reward of fast cashouts.