Cryptocurrency: What Does It Mean for the Future of Online Poker?

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Cryptocurrency has taken the world by storm over the last 12 months. As 2017 came to a close, Bitcoin hit new heights that nobody expected to see so soon. People who had previously been sceptical were now starting to believe. But what does this mean for the online poker industry? Let’s take a look at how this new technology could revolutionise the entire scene.

New Technology

Everybody these days has heard of Bitcoin, but it’s the blockchain technology that we as poker players are interested in, for many different reasons. At the turn of the year online poker celebrated its 20th birthday, and those of us who have been around for the entire journey will be able to recall just about every kind of scandal you could imagine.

It’s no surprise either, because all of these issues were highlighted as obvious concerns while the internet was still in its early years. People would think we were mad for playing cards on the internet; how do know people can’t see your cards, they would ask. Others would try to convince you that the virtual deck was rigged. These points fell by the wayside though, when it came to the basic worry that the funds you uploaded might fall into a black hole, never to be seen again. This, unfortunately, has happened on several occasions.

So, how can cryptocurrency help us on this front? The key is the blockchain concept that was first seen as an integral part of Bitcoin, the world’s first cryptocurrency. The purpose in this sense was to prevent “double spending”. After all what use is a virtual currency without a reliable way to track who spends what. Using this method to upload funds to a poker site would remove almost all of the problems we face when using third party payment processors and storing money outside of a regular bank account.     

Some crypto-based sites are now claiming to be able to handle transfers instantly using another new technology called smart contracts. The cryptocurrency Ethereum was specifically designed to be used in this way and has another great upside compared to standard cash transfers. You will no longer need to keep any funds deposited with a third party!

Super Smart

Virtue Poker are a great example for all of these points. Backed by a number of well-known high-stakes pros such as Phil Ivey and Dan Colman, they are claiming that they will revolutionise online poker as we know it.

Rather than operating with a mixture of random currencies, Virtue are creating their own and will be soon having an ICO – Initial Coin Offering – to compete with the other 1,500 on the market. This doesn’t really affect us as players apart from the worry of storing a known volatile currency to play on a particular site. Most readers will have heard the news of Bitcoin’s roller-coaster at the end of last year; it won’t do your blood pressure any good to have a decent sized roll exposed to that kind of performance. You could always purchase every time you wish to play, but that also sounds like more hassle than it’s worth.

Virtue’s Ethereum-based currency will mirror its ability to use smart contracts to facilitate transfer of funds without actually storing them anywhere except the tables in use. This effect removes at a stroke the prospect of a player losing money into a black hole. No more worries about having your account frozen indiscriminately by support who then proceed to ignore any further contact. No more websites closing their doors for business and disappearing with your money. The smart contract gives us the ultimate in transparency; something which has sadly been lacking in some quarters over the years.

Joseph Lubin, founder of global blockchain technology development studio ConsenSys and co-founder of Ethereum, was extremely bullish when talking to the media ahead of Virtue Poker’s ICO. ConsenSys have put together the decentralised poker network that will be used by Virtue Poker, and they are confident that everything is now in place to start their revolution.

“Virtue Poker represents a bold early step towards revolutionizing the online gaming industry. By enabling players to be in full control of their assets except in the moments that they are held in escrow by a smart contract, and by creating a framework within which shuffles are provably fair, Virtue Poker ups the ante regarding user-friendliness and security for the online poker and gaming industry.”

No More RNG

The worry about playing with a stacked RNG – random number generator – has always been a factor when choosing to play poker online, but that may also be a thing of the past thanks to blockchain technology.

This concept of playing on a decentralised network allows the tech guys to actually prove the integrity of the card shuffles. We also know that Virtue will not have any servers that are able to follow who has what cards. Players will be able to conduct all of their gameplay completely independently as part of a network with the other players.

It will be great to have full confidence that no company employee working behind the scenes can pull off another super user scandal. Ryan Gittleson, one of the co-founders of Virtue Poker said

“The lack of transparency and accountability in the practices of many online poker companies presents a great opportunity for blockchain technology to showcase its utility in a manner that will satisfy both players and regulators.”

Not All Good News

With so much good going for the crypto scene in poker it’s easy to fall into the trap of thinking everything will soon be like 2005 once again. Unfortunately, this isn’t yet the case.

CoinPoker, a new site who launched their own currency in January 2018, has come under serious fire for an alarming lack of security. A professional gaming journalist, Alex Weldon, uncovered abnormal traffic stats following an announcement of a new lucrative leaderboard promotion. CoinPoker is now giving away $500,000 every month in prizes related to volume, which is an obvious red rag to a bull when it comes to cheating. Many players being tracked are putting in a ridiculous number of hands in such a way that it’s just not believable the players are human.

This brings us onto the point that regardless of how much good blockchain technology can do for online poker we are still heavily reliant on the integrity of the website management. We need them to police our community for bot use and collusion; these issues will not go away otherwise.

This turning a blind eye has been a problem with the smaller websites over the years as they struggle to build up their traffic. It’s obviously for their benefit if they don’t have to ban players who break terms and conditions. They feel they can hide behind deniability when it comes to integrity as players have an impossible task to prove anything.

 

The Big Prize

When all is said and done, there is one single prize that will benefit everybody in the online poker community: the whole world player pool being put back together.

Setting up an account to play online poker in 2018 requires jumping through a few hoops, most of which relate to financial regulations. ID verification, proof of address, and linking to bank accounts are all totally standard now, and they are also the cause of a fragmented player pool. Cryptocurrency allows us to bypass legislation that effectively bans online poker by targeting the transfer of funds.

If governments continue to ignore cryptocurrency as nothing to worry about or get involved in, then there is no reason why regions such as the USA can not take advantage and re-join the rest of us. Governments are not taxing cryptocurrency profits as of yet, so as far as they are concerned we may as well be playing poker with buttons. This is surely an opportunity we should be taking advantage of.

The next year or two will tell us a lot about how online will develop for the long-term future. One part of that future will almost certainly be cryptocurrency, but we’ll have to wait and see if we can use it to its full potential.

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