SatoshiDice is a gambling website that has been acquired for $11.5 million by an undisclosed buyer. What makes this acquisition unique is that it was paid for using the virtual currency Bitcoin. SatoshiDice is a blockchain-based betting game where wagers can be placed without access to the website or running client software.
To play a game on SatoshiDice, you use a static address opened by the service, each having a different payout. The service determines if the wager wins or loses and sends a transaction in response with the payout to a winning bet or it returns a fraction of the house’s gain to a losing bet.
The website acts as a lucky dice game. Useds send their Bitcoins to the website and it picks a number. “The Ghost of Satoshi” rolls a number and people that selected a number that is lower than the dice roll wins. Around 5.3 million bets were placed and 3.9 million wins have ben paid out. Winnings are distributed within 30 seconds and there is a small transaction fee associated with each bet.
This deal is estimated in U.S. dollars because the transaction was made in Bitcoins. Around 126,315 Bitcoins are used to pay for the transaction. When SatoshiDice launched in April 2012, it was claimed to be the “most popular Bitcoin game in the world.” The website’s income was hitting around $50,000 per month as of January 2013, according to TheNextWeb.
On the Bitcoin securities exchange, SatoshiDice is listed as “MPEX.” SatoshiDice founder Erik Voorhees said that this deal is a 277% premium on their sales price and is a 175% premium on the company’s valuation. Voorhees is based in Panama.
“While I know some S.DICE owners intended to hold for a long time, and will thus be dismayed by the buyout, it is my sincere hope that this compensation level will be amenable. It is substantially higher than the contract mandates, and it is almost 3x higher than all private owners are being paid. It has not been easy to negotiate to this level, but I believe it is the right thing to do,” wrote Voorhees.