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Virtual Currency


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Title: Virtual Currency

Virtual Currency GamingAnalyzing Their
RelationshipBit by Bit(coin)
Michael D. Lipton, Q.C. Jack I. Tadman
What is Virtual Currency
  • What is virtual currency?
  • What is the connection between
  • virtual currency and gambling?
  • Virtual currency as currency used in social
    gaming (Value of virtual currency and virtual
    goods are generally restricted to virtual world)
    (E.g. World of Warcraft Gold, Zynga poker chips)
  • Virtual currency as electronic money (Form of
    alternative currency not produced by any central
    banks) (E.g. Bitcoin)

Zynga Poker
  • Social gaming on Facebook involving poker
  • Launched in 2007, had approximately 40 million
    users during height of its popularity
  • Users receive for free virtual currency in the
    form of poker chips. Users can buy more chips
    either through Facebook, on black markets, or by
    giving third parties users personal information.

  • Created by Satoshi Nakamoto an anonymous or
    pseudonymous developer or group of developers
  • Debuted in 2009
  • Used in peer-to-peer transactions in which
    participating parties recognize its value
  • No central bank or clearing house, no financial
    regulator, not tied to any currency
  • Bitcoin are stored and sent through e-wallets
  • Traded/exchanged through online virtual currency
    exchanges (Mt. Gox, TradeHill)

Bitcoin (contd)
  • Approximately 11 million Bitcoin have been mined,
    21 million Bitcoin in total.
  • Miners supply Bitcoin network with computing
    power needed to maintain the security of the
    block chain (a distributed technology that acts
    as Bitcoins ledger)
  • Every single Bitcoin carries the entire history
    of the transactions it has undergone, and any
    transfer from one owner to another becomes part
    of the code
  • Bitcoin is stored in such a way that the new
    owner is the only person allowed to spend it.
  • Miners are rewarded with blocks of issued
    bitcoins (a block currently contains 25
    bitcoins) this is how currency is issued
  • Price of Bitcoin fluctuates wildly. As of April
    23, 2013, 1 bitcoin is worth 130 USD

Bitcoin (contd)
Bitcoin/ USD chart
Virtual Currency Gambling
  • 3 Elements of Gambling
  • Consideration
  • Chance
  • Prize
  • Virtual Currency Gambling
  • E.g. Zynga Poker
  • E.g.,

Discussion Virtual Currency iGaming
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