Bitcoin on betfair

Blockchain will disrupt the traditional betting market, in a way that Betfair promised to, but failed. The early pioneers in the space are companies such as Peerplay (Bookie), Predictious, FairlayDev, BetMoose, Gnosis, Augur, Truthcoin and Bitcoin Hivemind. Most of these companies will not survive longer than two to three years, but they will lay the groundwork for what will be the most significant techtonic shift in the field of person to person betting. Broader market acceptance of the notion of a blockchain-enabled, decentralized betting market is likely to take as much as 10 years,

Betfair failed to disrupt the traditional betting space for a number of reasons. Its founders were greedy; they went for a big flotation. They diluted the core offering of the betting exchange, embracing online poker and casinos. A declining share price forced them to shore up gaps in the betting exchange model, through embracing the traditional bookmaker model, the very thing that they had set out to destroy. Finally, in the biggest irony of all, they agreed to sell the company to a traditional bookmaker. Hold the dream.

It is also the case that Betfair became bogged down in a regulatory quagmire. As an internet betting company, that threatened to disrupt the status quo, the company rattled the regulatory hornets nest. Subsequently, the company found itself having to spend hours of time and millions of pounds in an attempt to overcome regulatory hurdles.

In an interview in Computer Weekly (October 4 ), Betfair's then chief technology officer Tony McAlister highlighted some of the significant challenges the company faced as it tried to compete in the still highly fragmented European betting market;

Noting that having to implement these changes could easily have consumed all of Betfairs resources and budget McAlister described how the company had to build a a project A very costly exercise indeed.

At the current time in Europe, betting companies are also having to prepare for the Fourth Anti-Money Laundering Directive, which will come into force by June 26, , and will require them to carry out due diligence checks on all transactions of �2, or more.

The early pioneers in the blockchain sphere have choosen to nail their hats to the somewhat discredited notion of the prediction market. They are big on rhetoric, speaking of and and Blockchain technology will, according to the team at Augur, allow the company to overcome

One must assume that this is the same jurisdictional regulation that drove early prediction market pioneer Intrade out of the U.S. betting market.

In , the U.S. Commodity Futures Trading Commission filed a civil complaint in federal district court in Washington, DC, charging Intrade, then one of the world's leading Prediction Market betting companies with offering commodity option contracts to U.S. customers for trading, as well as soliciting, accepting, and confirming the execution of orders from U.S. customers, all in violation of the CFTC�s ban on off-exchange options trading. The CFTC�s complaint also charges Intrade and TEN with making false statements concerning their options trading website in documents filed with the CFTC, and charges TEN with violating a CFTC cease and desist order.

The CFTC�s complaint also charged Intrade and TEN with knowingly filing false forms with the CFTC stating that Intrade limited its options offerings to eligible market participants. Contrary to these representations, the complaint alleges that Intrade unlawfully solicited and permitted retail U.S. customers to buy and sell off-exchange options on the website.

David Meister, the Director of the CFTC�s Division of Enforcement, stated at the time:

In response to the charges levelled against it Intrade took the decision to pull out of the U.S. betting market;

The themes at the centre of the debate are nothing new; the holy grail being to develop a truly global, decentralised prediction market, boasting low transaction costs and greater liquidity than has ever been seen before, that will serve a risk-transfer and price discovery function. The exchange that offers the lowest transaction costs, attracts the most informed traders and plays the most important role in price discovery. For the likes of Augur, a leading proponent of blockchain prediction markets, and a company with the stated aim of constructing a decentralised betting exchange in Ethereum, it will be the use of cryptocurrency that will enable true global access - such that a farmer in Nicaragua can hedge against crop failure.

With benefit comes risks, and whilst the notion of challenging the regulated model is a good one, matters such as fairness, transparency, integrity, privacy and general market stability are of paramount importance to traders in any market. These issues, which typically fell under the regulatory umbrella, will be dealt with through the that is embedded within blockchain technology. Issues, such as traders having to wait up to five days for their winnings to turn up in their bank accounts will be also be eradicated.

Of the belief that commercialization of blockchain remains a longer-term phenomenon, incumbent operators are happy to hide behind the very regulation that they detest. They are not taking the the blockchain prediction market companies seriously, because it is their belief that the excessive volatility of the cryptocurrencies (Bitcoin has seen its price range from $ to $1, in ) will ensure that they are simply never able to generate sufficient liquidity, such that they become a viable threat. Watch this space.

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