Blockchain-based betting game SatoshiDice has been sold for 126,315 BTC, which at the time of writing was worth around $11.47 million.
SatoshiDice (S.DICE), which claims to be "the most popular Bitcoin betting game in the universe", was launched by its operator Erik Voorhees in late April 2012. The company's shares have since been traded on MPEx, the Romanian Bitcoin securities exchange.
Yesterday evening (17th July), Voorhees announced the sale of the company, stating: "I believe this to be a solid, desirable, and fair outcome for those who have put their trust in S.DICE."
This is interesting news to the digital currency community as, to date, this is the first major acquisition of a company in the bitcoin space. What else is unusual is that the company was bought with bitcoin, not US dollars or another fiat currency.
The sale price works out at 0.00126315 BTC per share ($0.12), however, Voorhees said "for the good of the MPEx holders and for the sake of the general Bitcoin community, which the site always has intended to support and nurture," SatoshiDice will pay MPEx holders an extra 0.00223685 BTC ($0.2) per share, which brings the total to 0.0035 BTC ($0.32) per share.
His statement continues:
"This is a 277% premium over the sale price and a roughly 175% premium over the current market price of S.DICE shares on MPEx. It is also roughly equivalent to the average price of S.DICE shares at IPO (though BTC was $12 back then, and over $90 today)."
On top of the price per share being paid out, a small amount will be added to compensate users for the BTC that were deducted to fund development of the website.
Responses on bitcointalk to the announcement have been varied, with some forum members supporting Voorhees and others criticizing the move.
Forum member chriswilmer said: "Wow, that's awesome! Congratulations!"
However, TraderTimm was not so complimentary: " Well, thank you Erik for showing once and for all you're just a profit-chaser - you don't care about bitcoin, well, only enough to get your money out of it."
John Bridge, MD at BitCapital, told CoinDesk he was somewhat surprised the site sold for such a high amount.
"I presume it's a significant existing gaming institute that's bought it. If it has gone to one of the major players in the gaming industry and they're looking to expand beyond the SatoshiDice model, that would be positive for bitcoin as it would give it greater exposure to people who don't currently know about it," he said.
Bridge went on to say and he's surprised a lot of the major operators in the gaming space haven't jumped on the "bitcoin bandwagon" already, for example by adding it as a method of funding accounts.
"There are no transaction fees, it's irreversible, it's just perfect for the online gaming industry," he added.
Darragh Browne, founder of Blockspin, said the effect of the sale really depends on whether shareholders want to cash out to fiat, or reinvest their windfall in the bitcoin economy.
"We have already seen the price drop a little today, but I'd imagine that is mainly due to speculation. The fact that there are still reports of Mt. Gox's on-going problems processing fiat wire transfers is a slightly larger concern for bitcoin prices than SatoshiDice shareholders cashing out," he added.
Browne said there is a possibility investors in SatoshiDice may now look to re-invest their windfall in other assets, such as bitcoin securities like ASICMiner shares.
"We could see a bump in share prices on Bitfunder, BTCT.co and Litecoin Global, and it's worth watching the price of alternative cryptocurrencies such as Litecoin, PPCoin, Namecoin and Primecoin," he concluded.
What effect will the sale of SatoshiDice have on bitcoin? Let us know your thoughts by leaving a comment below.