I've covered large Bitcoin Bets before, but now there is a new largest Bet in the space in an absolute sense. With a pool of 2816.69 BTC the bet that Bitcoin surpasses Berkshire as an investment went from being the bet in Bitcoin which had seen the most action to also being the one with the most money. And the resolution of the bet is still roughly six months out. As the news reported, this is the equivalent of well over a million dollars, even if Bitcoin keeps crashing. For perspective less than a year ago it would have been well over three million, and within less than two years ago it wouldn't have been enough to buy a new pickup truck.
Fuck, it was just last week that I highlighted the massive odds correction on the bet where Bitcoin breaks $10,000 before the end of November. Between these two bets, the largest on BitBet at the moment there are 3629.97 Bitcoins in play. A consequence of this is that when Reddit notices the action happening on the Berkshire bet, people running ventures that would aspire to compete with BitBet jump in like this:
Which leads to:
And the discussion misses that BitBet wins the betting money because it is the platform. In a low friction environment like Bitcoin, markets tend to centralize, and when it comes to pricing risk the money has come to settle using on BitBet as the clearinghouse for pricing risk. Other venues may and likely do get greater sums passed through them for certain kinds of bets. Many kinds of sports bets provide a great example of this. My betting ticket for this weekend's NCAA football games were all done on a platform that wasn't BitBet, but between my twelve selections I put down all of 0.025 BTC over the 12 bets at fixed odds. I didn't price the house's vig on those lines and though it is likely more than the a parimutuel model can offer I get to know exactly how much I am sweating over, provided the book stays open long enough for me to take any winnings out.1 Where I get taken to the screws of course is that to offer fixed odds the book takes a hefty vig. Betting this way can be a way to add excitement to a game you're watching, but it's a pretty shit way to price risk in any appreciable amounts.
So long as BitBet continues to operate reliably for the people who use it to hedge and price risk, there can't be a serious competitor to BitBet as the central clearing house for risk in the Bitcoin space. Given its history and the history of its operators, it seems exceedingly unlikely they'd fuck things up in this way. Where opportunity exists though is in leveraging the backstop that BitBet offers into creating interesting products on top of it, which also happens in the reddit thread:
And now we have an aspiring competitor make an actually interesting turn by using the Berkshire bet as the underlying signal for the a fixed odds offering of the sort they want to market. Now they have about 0.15 BTC unmatched on this bet so far, and they suppose this as a sort of demonstration of the differences between their system and the BitBet system. I have to wonder if maybe the conclusion they'll come to is that maybe they should work as a BitBet complement in this manner more frequently.
- I get to sweat twice over the bets! Bargain! [↩]