Phil Ivey Signs With Virtue Poker as Crypto Poker Wars Intensify
Here’s an interesting news item from late last week that’s worthy of a deeper delve: Internationally recognized poker pro Phil Ivey has signed a deal with online crypto-poker site Virtue Poker, serving as a “Poker Advisor.”
Ivey’s role appears to be rather softly defined, which likely translates into him repping the Virtue Poker brand (and maybe wearing some Virtue gear), while chatting up the site to his gambling-world pals and allowing his name to be used as part of the promotion of the brand.
Ivey becomes the third such prominent poker pro to join Virtue Poker in a poker advisory role, joining well-known online stars Daniel Colman and Brian Rast in that regard. Virtue Poker itself is among a newly emerging wave of cryptocurrency-based online poker sites seeking to carve themselves a larger niche.
In a feature at a large site announcing Ivey’s deal with Virtue, Ivey’s role was described as follows: “First, he will assist with product development, helping the Virtue team fine-tune their nearly finished poker client. Second, he can use his extensive contacts in the poker world to expand relationships for the company, adding value through increased reach and brand awareness. Finally, he can provide valuable info about the state of the poker world, from possible target markets to new and innovative game offerings.”
A quote attributed to Ivey — and I’ll bet a fiver he didn’t actually say it — says ““I’m looking forward to serving as a strategic adviser to the Virtue Poker team. I believe their new peer-to-peer solution built using blockchain technology can add significant value to the online poker experience.” That’s a particularly psychobabble-flavored example of mush; people might write that way, but they don’t talk that way.
All in good fun, of course, and also noting that the phrase “proud to serve as a Virtue Poker brand ambassador” was somehow overlooked.
Yet there’s far more to this story. As I pointed toward, we’re amid a second generation of cryptocurrency-based online poker sites trying to carve themselves a market niche, which is opening up a new wave of marketing initiatives designed at taking the whole notion of using these virtual currencies more mainstream. That means using big-name pros such as Ivey as tools to spread the word.
Virtue Poker is one of several new sites to pitch itself as not only a crypto-friendly site, but as a crypto-only site, meaning it’s the currency medium through which the site itself operates. Virtue is based on Ethereum, one of several virtual currencies that’s become part of a second tier of such cryptos, all seeking to ride a bit on the coattails of Bitcoin’s vast success. The use of crypto currencies themselves requires would-be players to climb a learning curve and buy into the whole virtual-currency concept, and that’s part of what sites such as Virtue Poker have to do — sell the whole idea to the mainstream.
For all the possible benefits that crypto currencies offer, including explosive value growth, there’s downside as well. Ethereum itself, the financial backbone of Virtue, recently suffered a disaster from a latent development bug that resulted in a third-party wallet service having roughly $170 million of Ethereum’s resident coin, ether, frozen and unretrievable by its owners. The wallet in question, Parity, admitted it knew for months of the design flaw that caused the freezing for months and hadn’t bothered to fix it.
Ethereum’s far from the first crypto to suffer from such human error or interference. Crypto-market big-boy Bitcoin suffered its own watershed disaster with the Mt. Gox debacle, and there have been plenty of other examples. While poker players are, for the most part, irredeemable gamblers, it’s still an uphill marketing battle to truly bring financial vehicles with such open-ended risk to the more conservative mainstream.
It’s interesting to note that the puff piece touting Ivey’s signing with Virtue notes Ethereum’s volatility, and also that the currency reached an all-time value high, but mentioned nothing of the Parity disaster, which has been the dominant Ethereum news story in recent weeks. That’s perhaps not fair to the average reader.
With some of these pitfalls properly regarded, however, sites such as Virtue Poker do offer some promising qualities. Two in particularly are the fact that both the banking and the actual playing require distributed player inputs in order to function, greatly reducing the role that the site itself plays.
Regarding the banking issues, Virtue Poker does not serve as a bank for Ethereum. Instead, participating players actually wager small amounts of Ethereum into a pool that covers only that cash-game hand or tourney pool. Ethereum then takes its rake based on that small amount, thus keeping most of the players’ crypto bankrolls in the players’ possession, and not the site’s.
That’s a neat solution, and rather the opposite of the one proposed by the farcical Breakout Poker a couple of years back. If one remembers, as originally pitched, one had to invest in that site’s medium, Breakout Coin, using other crypto currencies. The Breakout currency wasn’t good anywhere else, while the site got to exchange it for other, more popular currencies. Ummm, no thanks, then or now. Breakout Poker never got off the ground, though the coin medium behind it was launched, inevitably.
But let’s get back to the more plausible and interesting, as with Virtue Poker and Ethereum. Remember all the problems of some earlier sites with insider cheating? Virtue Poker’s construction contains a mechanism to protect against it: Rather than shuffling a virtual deck of cards based on a centrally-based, randomly generated seed, Virtue employs a peer-to-peer randomization technique using inputs from all players involved in the action to generate a different version of a random shuffle.
Virtue’s co-founder, Ryan Gittelson, claimed in the big site’s puff piece that company employees are thus unable to see the cards being dealt in any given hand, and this thus prevents insider cheating. That’s great if true, though I’m not taking the claim quite at face value. At some point, the hands have to be compared, winners determined, and winning shipped, meaning that some central collection/comparison facility must be employed.
Further, the shady insider cheating in online poker’s past that Virtue Poker’s promotional material references wasn’t based on corrupting the unknown future, but on sharing the past and known results — meaning the hole cards already dealt to the cheater’s opponents. Being able to see all cards dealt in a given hand is a mandatory development function. Disabling the ability to see all those dealt cards is being done in a different way here, via the peer-to-peer distribution, but it doesn’t mean that the development tool can’t be recreated and implemented nor the distribution protocol be reframed. It’s all just a matter of trust, claims notwithstanding. It’s a sad part of poker’s past that on a few occasions, that trust has been violated.
That doesn’t mean that Virtue Poker might not turn out to be the next and neatest thing since sliced bread. Still, as its founders readily admit, the site and other crypto-based offerings face an uphill struggle. That tough path not only comes from the presence of traditional market giants, but from the fact that governments tend to look askance at such unregulated offerings. Crypto-only poker sites remain in a sort of limbo, an operational in-between universe. And maybe Virtue Poker can help change that.