Bowling for Bitcoins

Meet the Trader is a weekly interview I have started to help the providers of the Bitcoin economy gain exposure.

Episode 03:   Michael Hendrix of CoinPal, Coincard, JJGames, and VGPC.com.

Update:  CoinPal has suspended its service as a result of Paypal’s action against his account.

Michael runs CoinPal, which is a way to buy small amounts of Bitcoins with a PayPal account. He also runs CoinCard, which converts Bitcoins into

PayPal payments and pizza.  Read the interview to see what’s next for CoinCard.

A software development consultant by day, Michael has 4 young kids and lives way out in the sticks.   Be careful guys: this interview bites:

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Michael: It’s more likely that the last person leaves town and the place blows away in the wind.  Hanna was a busy coal mining town for 100 years but most of the mines closed a decade ago.  A few hundred people stayed behind. 

I’m originally from the Denver suburbs, but have lived in Wyoming for the last dozen years.  I love it here: there’s no income tax, there are guns everywhere, it still fees like frontier and has bred tough, independent people.  It’s an isolated, beautiful kind of place.

Spencer: It sounds like your whole family is entreprenurial. Are your kids going to grow up with the “startup bug?”

Michael: I grew up in an entrepreneurial environment.  My father started a real estate development company before I was born.  My grandfather started one of the largest mortuaries in Denver.  My grandmother started a large life insurance company.  My kids are all still pretty young, so it’ll be interesting to see if they choose that same path in life.

Spencer: With your profit margins being so thin, do you plan on raising fees?

Michael: I don’t plan to raise fees. With CoinPal, that’s partly because high fees select against honest buyers. A scammer doesn’t care how high the fees are because he’s paying with stolen money. An honest buyer is exactly the opposite. If CoinPal ever makes much money, it’ll be through improved automation, better conversion rates and broader Bitcoin popularity. I probably won’t raise CoinCard fees either. That’s partly because having an easy way out of Bitcoins makes the currency more useful. I’ll probably focus on better efficiency with CoinCard too.

Spencer: How long did it take you to get your first customer for each service?

Spencer: Are you sticking with CoinPal’s simple, 1994-flashback design?

Michael: Actually, efforts are afoot to improve the design substantially.  It may be a couple more weeks before it’s finished as the work is being done by a talented, therefore busy, designer.  Incidentally, the design job is being paid for with Bitcoins.  I’ve made a few personal purchases with Bitcoin and I have to say that it makes a great currency for the Internet.  Maybe it’s just confirmation bias, but I’m routinely reminded in my daily affairs why Bitcoin is such an important project.  It’s fun to be a part of that.

If you would like to be interviewed, please contact me here.

Meet the Trader is a weekly interview I have started to help the providers of the Bitcoin economy gain exposure.

Episode 02: “Cusipzzz” of BTCSportsBet

Over the past 7 days, I have come to know BTC Sports Bet as a fun and exceedingly convenient service.  There are no fees up front and no Paypal to worry about.  The site only accepts and pays out in Bitcoin. Many sports are covered from Cricket to e-sports like Starcraft 2 and DotA.  Behind the site’s operation are two anonymous managers. (Only one is known of publicly by his or her IRC nickname, “Cusipzzz.”)

BTC Sports Bet has truly shown to me that no one needs permission to start a business. …  Now for the interview:

Spencer:  Alright mystery man, we like to open with 3 personal questions at the Bulletin, but because you’re anonymous, we’ll just have fun with the opener…

Spencer:  As the manager of BTCSportsBet, how does it feel when you wake up in the morning? (Knowing that you have sinned all night.)

Cusipzzz: Fantastic! Although sometimes I don’t wake up ’til the afternoon.

Spencer: If you could be in jail in any country in the world, where would it be?

Cusipzzz: Someplace warm and tropical. Do they have a jail in the Cayman Islands?

Spencer:  Question from the IRC. How do you pronounce your name Cusipzzz ?

Cusipzzz: Hah! I get that question a lot. It’s pronounced like the letter Q and the word sips. Q-sips. Easy, no?

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Q: What was the inspiration for Sportsbook?

Cusipzzz: I’ve run other sportsbetting related sites in the past. As soon as I understood the concept of Bitcoin – something that solves the issues of people who cannot easily move money for gambling – the idea came pretty fast! It was late November 2010.

Spencer: When you became involved with the Bitcoin currency, how long was it before you knew that you wanted to build a web service?

Cusipzzz: Right away! It just was the perfect combination for sportsbetting, and I knew from my other work it could be done quickly. A global, digital currency provides so many advantages – people from all over the world can sign up, fund an account, and place bets in minutes! Traditional sportsbooks usually only serve a local customer base, or are forced to carry many currency options and deal with conversion headaches.

Spencer: What did you code the service in, and what are some of the tools you have found useful?

Cusipzzz: PHP is all the flexibility I needed. I reviewed some of the early PHP – JSON code and it seemed very straightforward. Thanks to everyone who did the early heavy lifting on those components. Also, blockexplorer.com is a great way to learn about Bitcoin – watching new blocks, tracking transactions, change, and addresses on there really puts the entire picture together.

Spencer: How long did it take you and your (mystery) partner to finish the first version of the site? How long ago was that?

Cusipzzz: It took about a month. We moved some code from a similar site we had worked on before, and then basically bolted on the Bitcoin functionality. This was in late December 2010.

Spencer: So how many people have signed up for your service thus far?

Cusipzzz: Over 100

Spencer: I find the flexible wallet backup an extremely useful feature of the site. (Beats the hell out of backing the wallet file up to an external drive after each transaction.)
When you first had the idea for the Sportsbook, were you aware that the backup feature would be so handy? Do you have any plans for further-developing that feature?

Cusipzzz: Yes, at the time there were only a couple of trusted e-wallet providers (mtgox, mybitcoin) and the flexibility they provided was really nice, so I knew I wanted to offer that to the users of BTCSportsBet.com. It’s flexible and it helps build trust for people holding balances. If someone tells a friend, for example, that they will send them 5 BTC for whatever reason they can quickly log in to their BTCSportsBet account, paste the address in, and send the 5 BTC. Faster than SSH’ing into a VPS to send, or even loading up a client locally and potentially waiting for blocks to download. All funds are available 24/7.

An additional wallet-like feature coming in the future is the ability to save multple withdrawal addresses and label them for future use. Such as “Address 1 – My VPS’, ‘Address 2 – My stupid brother, ‘Address 3 – My BitPorn Account’ etc. Select an address, enter amount, and send!

Spencer: I am assuming you use json-rpc to interface with your bitcoin daemon. Can you explain how you keep the bitcoins belonging to one user separate from the bitcoins belonging to other users?

Cusipzzz: Yes, JSON RPC. each user has a bitcoin account as well as a pure sportsbook account. Deposits are auto-credited to the correct account as the two accounts are linked.

Spencer: Does running a critical service keep you up at night? By this I mean, how do you handle redundancy?

Cusipzzz: No, late events tend to keep me up at night! There are regular backups, often for wallets – as well as full-blown Dev and Test environments for the site.

Spencer: Where do you draw your lines or odds from on obscure e-sports like DotA and SC2?

Cusipzzz: Many sources! These E-Sports have really become popular for betting and odds are posted by several bookmakers. The site takes a survey of those sites and sets the odds, which often move depending on the betting action.

Spencer: No fees. That’s awesome. I’ve believe I’ve spotted a source of BTC’s revenue. Odds are slightly spread out, and you take the winnings closer to the line, is this a common or unique approach to gambling sites?

Cusipzzz: Yes, very common. The spread between the odds on each teams is known as the vigorish (vig) or ‘juice’. So if an even amount is wagered on both sides, the winning players win slightly less than the losing players lose. That is the bookmaker profit. But often the action on a game is not even, so there is some risk involved – but BTCSportsBet is well capitalized.

Spencer: How’s revenue? Making bank?

Cusipzzz: Not really – I like to keep the “vig” low as the site is pretty automated. The posted odds are better or very competitive to any major sportsbook!

Spencer: You’re practiced in the art of anonymity. What are some of your tricks? What are its pros and cons?

Cusipzzz: I think it’s good practice for everyone, even if you are not worried about being tracked. I use a network of small, global VPSes that are used for proxying and as VPNs. The more layers the better. One of the cons is that it is time consuming to do it properly. Most people just like to fire up a web browser and go. It takes time to properly connect and proxy to different servers and confirm each leg is working properly.

-End of interview.

If you would like to be interviewed, please contact me here.

Meet the Trader is a weekly interview I’ll be doing to help the providers of the Bitcoin economy gain exposure.

Episode 01:  Peng Zhong of Nylira.

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Spencer:  Hey Peng! Thanks for doing the interview!

Peng:  Hello Spencer. It’s nice to meet you.

Spencer:  We’ll get to your work in a minute, first let’s get to know you in three questions.

Spencer:  I play darts when I’m bored, what do you do?

Peng:  I listen to music. NIN, Fever Ray, Massive Attack.

Spencer:  You seem to be a man of the world (Hong Kong, San Fran). How did you end up in Berlin?

Peng: I’ve been spending time exploring Europe. Berlin is a comfortable place to get work done.

Spencer: When’s David Hasselhoff’s next album coming out? And is he as big there as he in Arkansas?

Peng:  It’s a common misconception that he’s big in Germany. I’ve asked around and I’ve gotten eye rolls at best.

Spencer: I’ve noticed your home page for your website has changed. I liked your old site too, why the switch?

Peng:  My new site is targeted at web developers who need help with visual design. I find that I prefer interacting with tech-savvy entrepreneurs. We’re more or less on the same wavelength, which means there’s less explaining to do.

Spencer: Two weeks at a flat rate, is that still your tag line?

Peng:  Flat rate yes, two weeks no. I have flexible work requirements, and I’ve found that the arbitrary two week wall has turned away projects I wouldn’t have minded doing.

Spencer: Looks like you might have been swept into the Ruby on Rails movement. What are your thoughts on Ruby/Rails vs PHP?

Peng: Ruby is a beautiful language, and Rails is a fantastic tool for quickly building a RDBMS-backed application. I don’t have an opinion on PHP, since I don’t have any experience with it.

Spencer: How did you hear about Bitcoin?

Peng:   There was a thread on Hacker News about the viability of Bitcoin mining for profit with a Radeon HD 5970. That piqued my interest.

Spencer: Have you had any Bitcoin clients to date?

Peng:  Not yet. I only found out about Bitcoin a week ago, and I’ve been busy in the meantime. That said, I can’t wait for my first BTC client.

Spencer: Again, thanks for your time!

Peng:   Thank you for the interview.

–
Peng Zhong

Information Architect

http://nylira.com