Talking Bitcoin with Collin Moshman

Our SNG Guru is also an early adopter of CryptoCurrency and he kindly took some time out with us to explain how it may impact poker.

Collin Moshman
Collin Moshman

You were an early champion of Bitcoin, what did you like so much back then, and what if anything has changed now?

Collin Moshman: I loved that it’s money you can hold yourself; transfer it anywhere in the world almost instantly, without needing permission from anyone; and that it has a fixed supply so you’re not constantly losing purchasing power. With normal currencies like the dollar or euro, governments can print an endless supply, so your savings will steadily buy less and less.

One thing that’s changed is that there’s a lot more disagreement within the community for the future of Bitcoin, but that was probably inevitable as the network climbed from being trivial in the scheme of financial markets to having a value over $100B.

As an early adopter, do you find yourself saying "I told you so" a lot?

Collin Moshman: Definitely not. When I first got into Bitcoin several years ago, the early adapters were the ones using it when it cost $1 per coin. And if you got in at $1, you probably considered early adapters to be those buying and using it when the exchange rate was 10,000 coins for a couple of pizzas.

Ultimately we’re all early adapters. While Bitcoin has grown tremendously, it’s still a vast minority who own and use it. For that reason, anyone who owns or uses Bitcoin today will 100% be considered an early adapter in the success case where Bitcoin grows to a market cap (total value of all coins) higher than gold’s and coins potentially cost around 100x more than they do today.

Why do you think Bitcoin has not been adopted by a major poker room yet?

Collin Moshman: While there are definitely sites that use and encourage Bitcoin, I believe that Stars must have some legal or regulatory reason for continuing to steer clear of it at this point. They could accept Bitcoin deposits, and have them instantly converted to USD/Euro/etc, for lower processing fees and with no possibility of fraud or chargebacks. If there aren’t legal/regulatory barriers, then I’m unsure what their reasoning would be.

"Something catastrophic could happen"

Bitcoin crash

Specifically what do you like about Crypto as it relates to poker?

Collin Moshman: Poker is an international community. Suppose you’re in a country where Stars is banned. To get money offline, you might have to go from Stars to Skrill, then to a foreign bank account, and lastly to your domestic bank account. On each step along the way, you may be subject to fees (wiring, intermediate bank fees, currency conversions, etc). You also have to submit to verifications, questions on the source of funds, and in rare cases freezes or confiscation.

If you withdraw or trade your funds to Bitcoin, however, the money is yours. There’s no middlemen, permissions, or bank fees. You can then hold as an investment, make Amazon purchases at a discount, use a Bitcoin debit card, or convert inexpensively to money in the bank if needed.

What are your thoughts on when/if the price of Bitcoin will crash and/or stablise?

Collin Moshman: Something catastrophic could still happen to Bitcoin, like a major flaw in the protocol not yet discovered. If that doesn’t happen, I expect Bitcoin to follow its normal pattern and the price chart to look like the graph of a good MTT player for quite a while still – steadily going up as new investors buy, falling when speculators find an excuse for panic, and then making new all time highs again (sometimes in a week, month, or year).

But there are no sure things. It is definitely still possible that events transpire causing Bitcoin to fall to $0. And there is no question that temporary crashes can and will continue to occur. If you’re not prepared for a drop of at least 30-40% to happen at any point, you’re going to be disappointed.

In general what are your thoughts on the other Cryptos like Ethereum?

Collin Moshman: Bitcoin is the most secure, most widely accepted, with the best brand and name recognition, and has the strongest network effects. It’s definitely possible another coin will take over the #1 slot, but I don’t see it happening anytime soon. Coins like Monero and Ethereum have other use cases and may go up significantly, but I believe most of the 1000+ altcoins are heading to $0 in the long-term and my own approach is to stick almost entirely with Bitcoin.

"Poker players have to be careful"

Doug Polk
Doug Polk has launched a Crypto news site

The poker community has become de facto Crypto traders. Is that a good thing? In one sense poker players would make good traders, in another a lot of inexperienced people have a lot of their net worth in something very volotile they may not understand.

Collin Moshman: It’s always a mistake to make an investment in something you don’t understand just because other people are doing it and have been making money. My belief though is that poker players generally have a higher understanding of Bitcoin and the risk/reward argument underpinning the investment thesis than the average buyer.

When it comes to active trading, however, you have to be careful. It’s very possible to lose money even in bull markets, and it requires significant knowledge and time to compete effectively against the serious Crypto traders (just like it does against to compete at a high level in poker). Buy-and-hold is the much better route unless you really know what you’re doing.

How would you explain the upcoming hard fork to a newbie?

Collin Moshman: There are people who want Bitcoin to act like a traditional currency you use to buy things with. On the other side are people who look at Bitcoin as a permission-less, secure digital gold. Both approaches have trade-offs. The people in the currency camp are willing to compromise on aspects like decentralization in order to increase the number of transactions the Bitcoin network can accommodate. The upcoming hard fork was designed for this purpose (scaling the network and allowing more transactions).

I personally side with the commodity/digital gold camp and am against the fork. One reason for this is that there’s a group of talented, highly skilled developers called the Bitcoin Core developers. Their work on making Bitcoin as secure and efficient as possible tremendously benefits users and investors. Most or all of the Bitcoin Core developers are against the hard fork. I highly value their work on Bitcoin and trust their knowledge for making technical decisions on the protocol.

Who in poker do you listen to and respect when it comes to Crypto?

Collin Moshman: One prominent poker player who talks a lot about Bitcoin is Doug Polk, who has some great content on aspects like effectively securing your coins. He’s also started a cool crypto news site called Coin Central. Outside of poker, the highest-content Bitcoin tweeter I follow is Tuur Demeester.

In general, what is your day-to-day involvement in Crypto? Are you spending a lot of your time on it?

Collin Moshman: While my approach to Crypto is mainly just buying and holding Bitcoin, I do spend time working to increase my understanding of the technical side of Bitcoin and new developments. From an investment perspective, I also take time to prepare for forked coins and airdrops, which have functioned like a dividend recently. Overall though, there’s a nice benefit to being primarily a holder – it’s much less time-intensive than actively trading the markets.

Collin Moshman is a coach at PokerStrategy.com, check out his videos and his coaching thread, plus join him every Wednesday evening for his weekly webinar.

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Comments (7)

newest first
  • imgoingtomirage

    #1

    Interesting read!
  • Tichwich85

    #2

    Hard fork is going to impact value of BTC in a negative way, nice read
  • KTU

    #3

    nice one!
  • Varune

    #4

    Whats your thought about the different HIYP programs out there?
  • Tichwich85

    #5

    @4 hiyp = high risk and many of them are pure scam, so be very careful with coin doublers or the ones with extreme percentages on very short time periods, its even safer to go forex without knowledge and follow trends than hiyp
  • erhooMaister

    #6

    Ethereum and bitcoin as 2 things completely different.
  • CollinMoshman

    #7

    Thanks guys!

    Varune, I had to look up what this meant :) Assuming it's high-yield investment program, then I 100% agree with Tichwich85. Don't trust anyone who wants your coins and promises you a high return.