That time I let outright ownership of BitBet slip through my fingers.

9, 9.5, 13.37, 15, 17.94766149, 20, 25, 26, 30, 33, 34, 40, 41, 50, 60, 61, 70, 71, 72, 73, 74, 75, 80, 81, 85, 86…

With my contributions to the événements emphasised, so went the receiver-hosted, time-delayed, live auction bids for the liquidated assetsi of one of the early pillars of the Bitcoin economy, a firm once valued at upwards of 2`000 BTC at the peak of its trading on MPEx – albeit in more innocent times – and most recently boasting a market cap of 250 BTC. And yet, as Bitcoin’s built-in Frühlingdramamaschineii knows no bounds and yields no quarter to its prisoners – and barring any monkey business with the transfer of proceeds and assets – BitBet has just sold for a third of that latter value, or ~3 times P/E,iii at a sale price of 86 BTC to a man known only as Znort987.iv

With a grueling, relentless one-upper strategy,v over the course of seven straight hours of back-and-forth bidding, Znort987 weeded out first former-co-owner kakobrekla, then receiver davout, before finally topping yours truly. Who knows how high it could’ve gone, maybe 100, perhaps even 150 or 200, but I’m not naive enough to imagine that I’m some sort of insurmountably capitalised bitcoin holder,vi much less the richest investor fool to ever walk the earth and simultaneously see value in an online gambling website based on Bitcoin. So that a bettor from out of the woodworks – one who I’d never heard of before but who’d apparently worked on the MPEx FAQ page a lifetime ago, back even before the #b-a logs began – materialised like so many T-1000s – with pockets of gold and galleons of gumption – to beat the more familiars comers wasn’t entirely surprising, even if it was mildly disappointing on a personal level.

It would’ve been very, very cool to have purchased such a unique piece of infrastructure in an industry that I continue to see opportunity in. As I’m not a programmer myself and could scarcely imagine what such a website would cost to build from scratch, if indeed it were even possible to do so, this auction was quite possibly a once-in-a-lifetime opportunity. But surely, only up to a point. While my ex post rationalisation engines are now working overtime – their iron hulls visibly radiating waste heat – suffice to say that BitBet isn’t worth infinity, even if it would intuitively appear to be worth more than 0.00057% of the entire Bitcoin economy.vii But it’s a slippery slope between 0, 1, and infinity, particularly when the medium-term viability of the underlying currency itself is so tenuous. Even still, while I don’t imagine that I’ll be alone in betting on BitBet v2 with some trepidation,viii the new owner being an unknown quantity and the days of the Bitcoin scam far from over, I look forward to seeing what changes he makes. I certainly had a few in mind.

In any event, kudos for davout for coming up with such a compelling auction format. Even if it was poorly specified, the one-hour-time-test for the final bid was a spot-on idea. Although I was eked out by 39 seconds at one point, and mistakenly announced as the winning bidder at 70 BTC, having such an unusually large amount of time between bids – certainly compared to most “live” auctions – with which to reflect, meditate, analyse, re-analyse, go for a walk, have a shower, crunch numbers, eat brunch, verbalise my thoughts aloud, study the realtime discourse in channel, and more, was a pretty thrilling experience.

Owning BitBet outright would’ve been pretty unforgettable too, but as someone who intended to own and operate it as a private business and not just sell-off hunks to VCs with money to burn, I just couldn’t wrap my head around the value proposition past 86 BTC, not with an typical monthly profit of 2.5 BTC net of considerable sweat capital. Then again, maybe I needed to think longer-term… Three, five, ten go the years. How will a few dozen bitcoins for a turn-key cash-flow-positive Bitcoin business look then ?

I truly wonder.

___ ___ ___

  1. The auction was for BitBet’s domain name, codebase, database, and Twitter account.
  2. It sort of has to be German, doesn’t it.
  3. Net of the aberrant MP v. WB mega-bet, which was a positive black swan of a magnitude that was hard to justify including in forward earnings projections. Forward earning projections were also muddled by the unknowability of just how much goodwill had been lost in the closure and payout delays of BitBet v1, though a 50% drop in bets for the first few months doesn’t seem an unreasonable estimate, particularly as the new owner wouldn’t have anywhere near the combined public stature of kako and MP.
  4. His WoT ratings.
  5. dilbert topper 1 dilbert topper 2


  6. There are 15 mn+ coins out there at the moment, lest we forget.
  7. For comparison purposes, if with a healthy grain of salt, Bet365 is valued at ~0.000034% of the global fiat economy and Apple inc. is valued at ~0.03%. Not that these are necessarily useful comparisons – I certainly didn’t use them in my valuation calculations – but it may provide some perspective. Ok fine, just lulz then.
  8. If Znort is reading this, you can start to earn some street cred by making yourself a regular presence in the forum, presently housed on IRC at #trilema.

19 thoughts on “That time I let outright ownership of BitBet slip through my fingers.

  1. > and currently boasting a market cap of 250 BTC

    Last trade is a dubious basis for extrapolating value of a company, especially one trading in distress. Not that I have a better figure or anything.

    • Pete D. says:

      Not that this is news to anyone, you least of all, but the entire prospect of valuing Bitcoin companies is dubious. It’s like trying to tell which of the children at the daycare will turn into a crown prosecutor. And then a stripper. It’s nothing short of incredible that some people actually have an eye for this.

    • mhj says:

      You don’t look at the kids. You look at the parents.

    • Pete D. says:

      Guess so eh. Hard to beat BitBet’s two dads too.

  2. IIRC danielpbarron was the first to be outbid, followed by me, then – the others.

    • Pete D. says:

      Aha. But their “bids” were unsigned.

    • As I mentioned in #trilema, signatures weren’t required for bidding. I’ve won Euloran auctions that bid up over a whole bitcoin, without anyone in participation ever signing anything.

    • Pete D. says:

      Dan, correct me if I’m wrong, but aren’t you guys PGP-authed in #eulora when bidding on slimy toads or whatever ? Because if so, signatures would therefore be implicitly present in those auctions, whereas this auction took place in the comments section of a public blog, where no such assumptions could be made and explicit steps to verify our identities had to be taken. That’s why we PGP-signed our bets and even included blockheights earlier on in the process. Really, your Eulora auctions work the same way.

    • If you mean the IRC channel, I suppose most of us are usually “upped” in the main channel, not that this should make for binding contractual agreements. That said, plenty of noobs host and bid on auctions without even being present in the main channel, and the particularly pricey auctions take place in the game itself. Although it’s true that our username and password is initially encrypted to us with our GPG key, no further use of keys is needed beyond that point. It’s been more than a year that I’ve logged into Eulora with a saved password on my online machine; far from the level of security an airgapped GPG key provides.

    • Pete D. says:

      Still, everyone in Eulora has a PGP key and users require it to play, if perhaps not in every session (but ianae). Either way, a blog is quite obviously a much more open environment with significantly lower barriers to entry than the hemmed-in worlds of MMORPGs. For the bbet auction, PGP sigs were a necessary precaution and one that the serious bidders had no qualms about complying with.

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