Everybody who’s even remotely interested in the cryptocurrency market is well aware of the huge increase in value Bitcoin has been experiencing lately. Although the value of the original cryptocurrency has been on a 4-year tear, the past year saw Bitcoin reaching heights that even the boldest would have struggled to predict.
And, while the value of Bitcoin is there for everyone to see (more than $17,000 at the time of writing), the question that pesters curious minds is what is the drive behind the relentless price surge? Certainly, media attention and speculative investing have been primary factors, but one early industry adopter may be the most overlooked and more than slightly influential: online poker.
Online Poker Was One of the Earliest to Use Bitcoin as an Online Currency
One thing that many people outside of online poker circles may not know is that poker sites were among the first to start accepting Bitcoin.
Online poker was one of the most popular pastimes and even a profession for quite a few people from the United States during the early 2000’s. However, the UIGEA (Unlawful Internet Gambling Enforcement Act) of 2006 created a situation where banks and payment processors had a lot of problems processing traditional fiat transactions to and from online poker, casino, and sports betting sites.
Over the next few years, the situation only became more complicated, making it hard, if not impossible, for poker sites to cater to players from the United States. At the same time, there was still a huge market of online gamblers in the US, which, from a business point of view, needed to be attended to.
Bitcoin presented itself as ideal solution to this conundrum. Pseudo-anonymous and not controlled by any central institution such as banks or governments, Bitcoin opened the path for online poker sites (Source: https://www.beatthefish.com/bitcoin-poker-sites/) to once again start catering to US players at large – at least the ones who were comfortable using Bitcoin, which wasn’t a negligible number.
The Bitcoin Boom Times up Well with Online Poker’s Black Friday
In April of 2011, a chain of events took place that came to be known as poker’s Black Friday. The US Department of Justice came after three of the biggest online poker sites catering to players from the US and effectively shut down their domains (Source: http://www.laweekly.com/news/black-friday-how-the-feds-shut-down-online-poker-2174120). This was a blow that the market never really recovered from and, after this, banking transactions to and from poker sites became nearly impossible.
Only a few months after that, in July of the same year, Bitcoin experienced its first real boom. The highest value the crypto reached up to that point was equalizing with USD but in July, one Bitcoin was valued at $31. Although it’s hard to say with certainty, it isn’t too far-fetched to think that online poker players buying Bitcoin to fund their account at one of the sites who added this option helped its values take off.
Of course, Bitcoin has had its ups and downs in the months and years to follow, with its value dropping significantly by early 2014. However, looking at everything, there are many indicators that Bitcoin’s boom was influenced by the online poker industry.
Online Gaming was a Guinea Pig for Freeing Suppressed Industries
Before the events of the Black Friday, Bitcoin was an interesting idea, but ordinary people didn’t really see much need for it. With the US suddenly shutting down the entire online poker scene, there hundreds of thousands of players who were barred from doing traditional business with an activity they loved and, in some instances, depended on.
All of a sudden, Bitcoin stopped being just an intriguing idea and turned into a concrete solution to a real problem. With governments only able to forbid deposits and withdrawals from traditional banking institutions, Bitcoin was the perfect workaround for online poker sites.
While It’s impossible to know the exact volume of Bitcoin transactions to and from poker sites, we can make some educated guesses.
Given how popular online poker was (and still is) in the United States, there were likely Bitcoin transactions taking place in the months and years after Black Friday. With more people buying Bitcoin, its value naturally started to rise. With more and more people using it successfully, the cryptocurrency became an actual method of payment for a fairly large market.
Today, Bitcoin is huge and there are numerous wealthy individuals and companies treating it as an investment opportunity and commercial payment option (Source: https://usethebitcoin.com/category/home/bitcoin_shops/, contributing to its stellar growth. However, back in the formative years of Bitcoin, it was the online poker industry that largely contributed to the emergence of this cryptocurrency from the shadows and onto the main stage.