From Colonial Lotteries to Satoshi Dice: The 4th and 5th Wave of Gambling is Upon Us

(Are we on the edge of the 4th gambling wave?)
The history of gambling in the United States has been studied, analyzed, and well documented in terms of its legal history but seemingly never in relation to overall national or global economic conditions, nor in relation to the newly proposed Kula Ring solution by Nick Szabo and John Nash’s lectures “Ideal Money”.
I Nelson Rose coined the concept of 3 waves starting with the Colonial lotteries, moving across WW1 and WWII prohibition and other movements, and the resurgence afterwards of destinations such as Las Vegas and Atlantic City. Rose predicts a total abolition after the 3rd wave, however, by using the theory of the Kula Ring we have shown that the morality of gambling is highly related to the overall underlying economic conditions and therefore quite predictable and not necessarily doomed by pattern or intrinsic fault.
Somewhat contrary to (or more specifically than) Roses’s explanation, historical gambling used as socialist and government type funding of ventures has ended in disaster and created avarice towards the industry while gambling created by worthy private investors with a long term plan has helped our society gain leaps and bounds in the field of technology (specifically but not confined to financial networks and transportation). We propose in the near future gambling will help propel space travel and bio tech fields and proper well constructed regulation and laws could pave the way to expedite this process. Among other points we also suggest a strong and stable global gaming environment is essential for the liberation and self governance of our civilization.
Lastly, and possibly most importantly, decentralization plays an integral role in our analysis and conclusions: we foresee giant industry moguls such as Sheldon Adelson and Steve Wynn will soon pave the way for the Nakamoto Consensus decentralized ID system by providing our civilization with next frontiers of Casino Resort/Online gambling ventures.

Certain economic “triumphs” have had a dramatic impact on the overall average value of our global economy[1]. For example completion of the first transcontinental railroad harnessed economic potential from the cost of transportation saved by not having to traverse the panama canal or sail around South America[2]. Although the exact variables are slightly different, it can be seen that the potential value is accessed by the completion of a type of Kula Ring, a solution proposed by Nick Szabo[3]. By relating the economic potential of the first transcontinental railroad to the Kula Ring solution we can start to understand this type of economic potential functions much like a potential energy or electricity not usable until “plugged” or “wired” into the existing larger economy-thus the railway for example and many other of these projects completed a type of economic electrical circuit[4]. Like electrical energy or any other type of energy this potential can be used for low cost high-output or it can be used archaically like lighting a propane BBQ with a stray electrical wire. The value gained from such giant connections at the cusp of our economic expansion is exponential[5] and therefore can generally be expected to propel humanity into a new age.

The drive for advancement in such fields as physical transportation or communication network transportation (which we might call transactions but are really also examples of physical transportation) comes from the inherent value gained from reaching new levels of technology or new frontiers (whether in the physical or “software” realm)[6].

These are points not previously accepted or presented until Nick Szabo’s papers were published as far as this author knows and understands.

Society or civilization naturally “gravitates” towards unleashing this potential by way of the invisible hand, whether from the faults or ideals of one man‘s army, individual wealthy businessman‘s ventures, or the different collective lottery’s of mankind’s cooperative social efforts. Generally it is often some combination of all of these with the least efficient and most wasteful of all being government taxation and social welfare programs[7].

“Gambling” has helped mankind reach some of these goals and complete large and significant Kula Rings by allowing investors to fund different ventures with casino based projects that create a sustainable infrastructure where other ventures are not as likely to thrive to the point of a needed self-sustainable threshold. The perceived morality of “Casinos” and “gambling” in general is typically related to the economic events associated with the corresponding times. In bad economic times gambling is often the first and biggest scapegoat since it develops and loses its political power (money) so rapidly. We can compare this observation with the 1st, 2nd, and 3rd waves of gambling in the history of the US versus different economic events. It is not correct to say then that gambling is possibly inherently bad, but instead that the economy of the world and the US has been slowly amassing a growing army of political and economic force that will eventually break its nationalistic and even global structure in order to pursue interests beyond the previously perceived limitations and particularly beyond the physical earth.

Casinos and gambling seems to have played a specific role in projects such as railroads and other important infrastructure which has helped expand and connect different societies and their economies. Let us not forget about the Chinese and Asian populations that were able to escape their own poverty and harsh government forces, by helping to complete the Kula ring in the form of the western side of the railway expansion[8]. No doubt gambling played a prominent role here[9] whether in a useful form of funding privatized ventures or wasteful form of funding centralized power structures. It is not gambling that has its’ own inherent morality either good or bad, but rather how our society uses it which ultimately decides its moral nature. The great mistake has been analyzing the morality of gambling solely through the history of public’s opinion on it and not by understanding the underlying economic effects with respect to implications of the Kula Ring concept[10].

As we progress to higher and higher levels of technology so too does our standard of living rise for the average citizen of this world. As the average life expectancy increases, humanity will develop a longer and longer outlook on “life”. This will affect behaviors (ie healthier lifestyles), politicians platforms, government policies (foreign and domestic), economics and finance, and many other aspects of our society and individual persons’ behaviors and orientations. As we see and record this phenomenon we begin to understand the atrocities of the past were not born or caused by intrinsic evil but instead the natural effects of an archaic technological battlefield of evolution that did in fact, in the long term, obviously trend towards bringing about a cohesive cooperative moral functioning and free (in the “liberty” sense) civilization, which will eventually be ready and willing to conquer and discover the largest extent of the universe possible (the author uses a finite metaphor of the universe in this context for “convenience” only).

The worst atrocities of man and life, and the times of least liberty and least freedoms came not from the evilest wishes of certain elite groups or individuals but rather from the centralization or pooling of a type of “power” that we might not yet have named or understood in our society. This power, we often refer to as money or political sway, not being fully understood by general mankind became a type of new age religious belief in the mind of the common and individual person. The truth of this is revealed when we view events throughout mankind’s history from a perspective of decentralization versus centralization[11].

Not understanding this is akin to a novice poker player trying to make a living in an over raked game full of sharks[12] or to a self professed “professional” slot machine player destined for disaster but full of faith and hope. Neurosis is sure to result of which logic is to be the obvious and only true cure. Not understanding this underlying explanation of our civilizations’ overall direction has caused a great psychological sickness in our collective consciousnesses. This sickness is not different than the crazed hamster that eventually began to receive random shocks in its’ pursuit of a new food pellet by the way of pressing the only button available to the creature (which did at some time, and seemingly does at other times bring food from the pressing of the button)[13]. By viewing the problem from a perspective that “appears” to give random outputs we increasingly grew a religious belief about the “seemingly” arbitrary nature of inputs.

This writing seeks to point out by the way of Nick Szabo, John Nash, Adam Smith, and the author here, that the different economic inputs do NOT in fact produce random and trivial outputs, and furthermore because of observations from Nash, Smith, and Szabo we are able to alleviate certain psychosomatic symptoms by identifying (and therefore dispelling) predominate “religiously based” economic beliefs.

We remain psychosomatic only because we have not properly understood the game in which we collectively gambled and must continue to gamble our futures in. We have been burned many times expecting an outcome that has no rational basis for expectation other than random chance since the factors considered and the perspectives in which we consider them were so limited and sometimes downright false or completely not justified. However when the true underlying force is revealed we are able to alleviate this sickness, not by treating the symptoms but by removing the root cause of the sickness-a false perspective mistakenly based on “beliefs” and not on logic or science.

Prohibition and regulation in many forms has become the solution in many short minded peoples’ and institutions’ eyes but not only does prohibition and regulatory control not work, they actually serve to create a centralization of power that perpetuates the harmful issues they supposedly seek to protect the general public from[14]. This eventually becomes instability that sets the stage for an inevitable massive immediate transfer of power and this naturally comes with its own significant social costs. Inevitably evolution finds its way but it can never be said that such regulations and controls helped expedite the process in a way that a freer flowing competitive market would[15].

Nick Szabo explains software, and our understanding of it, evolves from and through physical economic systems. We have sought to show the online gambling network inherently functions like a financial banking network and thus essentially creates its own currency that has its own stability function (ie interest rates and monetary supplies)[16]. In general it has been State’s function and purpose to continue to control and/or destabilize these financial networks but never to allow them to gain their own stability[17]. Bringing stability to our entire global financial network is and should be the primary goal of any serious and learned “economics” adviser or “financial planner”. Asymptotically Ideal Poker is aimed bringing about this exact stability in the poker world, and we believe this and asymptotically ideal money in the form of bitcoin or crypto-currency in general will bring this stability about in our global economy.

We have learned that the decentralization of ANY type of power or economic pooling of wealth allows us to “avert” the types of disastrous conditions that inevitably arise from centralization. It must also be suggested, in the long term view, a decentralized system will have necessarily reached (or at least trend towards) a Nash equilibrium since it must be known that the system will not tend towards centralization at some given point in the future (such uncertainly fuels instability opening the possibility for massive immediate shifts in “power”).

The missing link, if there can ever be said to be one, might simply have been for certain technological advances to evolve to a point where change is so rapid the effects of the general voter policy on decisions would be felt within the individual voters’ lifespan. This concept is to be coupled with the “voting population’s” average level of liquidity. A citizenry weak in game game theory is not a very democratic one. Well functioning “gambling systems” arise only from the good economic environment they reside in and they eventually result in intelligent or skilled voters[18]. We want the “players” to be “skillful” as “players” drive the security level of our society. This doesn’t pertain only to government democratic polls, but rather “voting” of all types, in all systems and fields.

This realization is set to fuel the next generation of technology based on the newly implemented discoveries of Nick Szabo encapsulated under the project entitled “bitcoin”. The “software” platform created by bitcoin will allow humanity to realize a vast amount of “game changing” and disruptive technologies set to redefine every aspect of our current daily lives. The costs saved and security gained from Nakamoto Consensus ID’s alone will be enough to completely dissolve nationalistic divisions that create and sustain much of the current economic and geopolitical wars. Once certain equilibriums have been reached, the decentralized exchanged markets will begin an asymptotic incline in the value of our economy we didn’t otherwise know or understand could possible come about[19]. This is gain shared by all citizens of this world and in the overall perspective of mankind’s history, the history of nations, or the history of government and institution, this change is set to happen overnight and before our very eyes.

In the future casinos might play a large part in the general public’s’ adoption of the Nakamoto Consensus decentralized ID system. By hyper facilitating travel around the world (and eventually beyond) with giant resort systems and destinations, privatized “Casino” mongols like Sheldon Adelson and Steve Wynn are likely to be the pioneers of the new projects that will secure and bring about this change[20].

Our example is a professional poker player traveling from resort to resort every few days, perhaps less than an hour or so from nation to nation or continent to continent, checking into travel stations, hotels, resorts, casinos, using automated payments all the way with crypto-currency, all decentralized and stored on the blockchain. This ID system is usable and accessible for law enforcement and for resort/travel security purpose yet remaining anonymous to the general public and those who have no business or purpose to access them (which also serves to restricts corrupt government and private or public use). Since individuals are meeting and crossing “checkpoints” with different levels of friends and network/social media contacts along the way, what then is the need for national “centralized” passports and ID’s?

In this the economic system of professional players or travelers (or both) that fills empty “off season” hotel rooms, games online, attends seminars and events, and spends their skilled winnings around the casino resorts that offers different prize packages and incentives exclusive to that particular room, resort, or account from online ventures. The value of the player/travelers comes in the efficiency gained by the infrastructure and advanced transportation networks created by the overall development[21]. Nations gain by the increased mobility of tourists and skilled persons that might otherwise not have traveled in the first place or at least not regularly to these previously “remote” destinations (point B) or the Nations or departures they might be now connected to (point A).

Because of this change, globally people will be more and more welcome to arrive in countries they wish to be in. We tend to fear localization because of this (exodus to previous, existing, or new homelands), but such a free market of travel would inspire a natural decentralization and equilibrium. We might not act with such a feeling of “scarcity of property” in this new world if we are free to travel and live anywhere anyways[22].

The social cost when done correctly is a “net positive”, so then the more important questions becomes what is the social benefit?

One next “step” will certainly be the extrapolation that we wish not to physically engage with other civilizations in the universe that are not at least this level of understanding. And that if we eventually did find such “inferior” beings we should only ever “secretly” attempt to help raise their level of knowledge appropriately OR not interfere at all. Simple realizations such as this really need the support of technological advancement (ie public space flight/tourism) to instantly affect not only our global consciousness but also the individual mind.

On the one hand we will soon be sending mass waves of humanity and machines out towards “the heavens” first towards mars, the moon, asteroids, and perhaps other planets and eventually beyond. We should expect and hope private entrepreneurs with a heavy stomach for skillful risk taking and gambling ventures of this sort will lead this charge. We should also expect privatized casino style ventures to ride and fund the frontier wave the entire way, paving the path for humanity to meet with whatever destiny awaits it however far away in time and space we might extend to[23].

Only with a planet full of highly skilled and praised game theorists can we afford and solve the risks of security and regulatory uncertainties that lay ahead of us[24]. In the overall picture defectors from the common norm of playing by the rules set by status quo become pioneers of new rules and new games evolved in new ever expanding frontiers. We want to be against immorality and crime, but it is never necessarily the gamblers of this world that are guilty of crimes by swaying popular opinion on issues or breaking through regulatory controls, but rather the regulators’ and controllers’ inability to realize what is a crime towards our fellow man, versus what is needed for advancement in the way of raising the average standard of living for everyone and every living being connected or connectable to our global (for now) economy.

On the other hand as we start to break our own religious beliefs and limiting beliefs we never knew we had, we gain a collective understanding of who we are as individuals and begin to collectively (but always also as individuals) ask many questions never collectively asked before. As different as we are all capable of growing to be, whether mentally or physically, technology has also allowed us to understand our similarities and helped us assimilate ourselves into a collective whole. Some call this the singularity. It is difficult for any mind to comprehend what it could possibly mean to be so advanced in both the physical and technological (ie Internet) worlds. But mankind has foreseen the merging of them, we understand the merging of them, and now it is but left for us to experience it-something the average human lifespan now predicts the average human will in fact likely live to experience.

The next frontiers[25] will be space travel and the merging of biology with technology and giant tycoons will want fund these things sometimes primarily with gambling and lottery and the peoples of the world should be happy to let them. Such projects gives philanthropic sorts the channels to support advancements of our civilization while funding the intellectual persons, who might not otherwise have a chance or opportunity to contributor to the advancement of our society, all while driving our security and freedoms to a level we might not have realized we didn’t have or could have.


[1]Chris Bates:


The Central Pacific RR broke ground on January 8, 1863. Essentially all of their manufactured railway supplies: picks, shovels, axes, hammers, saws, sledge hammers, spikes (about 5,500/mile), rock drills, black powder, bridge hardware, iron rails (about 350 rails/mile of 30 foot rails; 200,000 pounds/mile), fishplates (700/mile if using 30 foot rails), bolts and nuts to bolt the fishplates on, wrenches, railroad switches for the many railroad sidings needed on a one way track, railroad turntables, steam locomotives, railroad freight cars, railroad passenger cars, telegraph wire, insulators, batteries, telegraph keys, etc. would have to be imported from manufacturers on the East Coast of the United States. These goods would have to travel by trains to the east coast ports and loaded on board ships which then went on about 18,000 miles (29,000 km) and about 200 day (by regular sailing ship) trip or about 120 day trip (by Clipper ship) around South America’s Cape Horn or the much more expensive route across the new paddle steamer and Panama Railroad‘s crossing of the Isthmus of Panama—about a 40 day trip and twice as expensive per pound of merchandise. Most passenger traffic went via the much faster Panama route. After the goods got to the San Francisco Bay area they would have to be unloaded from the ships and put on river paddle steamers for transport over the final 130 miles (210 km) trip up the Sacramento River to the new state capital of Sacramento, California.


[4]See Ideal Money and opening quote:
“…we may become irrational in thinking about money and fail to be able to reason about it like a technology, such as radio, to be used more or less efficiently.

And also, if we view money as of importance in connection with transfers of utility, we can see that money itself is a sort of “utility”, using the word in another sense, comparable to supplies of water, electric energy or telecommunications.”


[6]Nick Szabo twitter: “ tl;dr: Adam Smith’s observations about division of labor and wins from specialization apply as much to software as to industry.”

[7]***Need to find something for this***…the least efficient and most wasteful of all being government taxation and social welfare programs.


The Central Pacific, facing a semi-skilled labor shortage, relied on some black employees[13] escaping the slavery and turmoil of the American Civil War and many emigrant Chinese manual laborers for construction. Most of these Chinese emigrants were escaping the poverty and terrors of the Taiping Revolution in the Kwangtung province in China. Supervisory, engineering and skilled jobs were done with experienced “white” workers including a lot of Irishmen. The Chinese, despite their small stature[14] and total lack of experience with railroad work, handled most of the heavy manual labor needed to get over and through the rugged Sierra Nevada mountains and across the Nevada and Utah deserts. In that time period there was only a very limited amount of work that could be done by animals, simple machines or black powder. Most of the black and white workers were paid $30.00/month and provided food and lodging. Higher skilled and supervisory jobs paid more. Most Chinese were initially paid $31.00/month and provided lodging. They bought and cooked their own food—just as they desired. In 1867 this was raised to $35.00/month after a strike.[15][16][17]

Upon the completion of their work on the CPRR’s portion of the Pacific Railroad, many Chinese workers moved on to other railroad construction jobs including with the Central and Southern Pacific. Of those that left the company’s employ, some returned to their families in China with their savings, while others sent to China for wives and settled in various western communities as miners, laundrymen, and restaurateurs. Some returned with their families and settled into “China towns” in various cities. The majority who remained in the United States, however, returned to and settled in the San Francisco Bay area, Sacramento, Marysville and elsewhere along the Pacific coast.

On January 8, 1863, Governor Leland Stanford ceremoniously broke ground in Sacramento, California, to begin construction of the Central Pacific Railroad.

Consequently, after a trial crew of Chinese workers was hired and found to work successfully, the Central Pacific expanded its efforts to hire more emigrant laborers—mostly Chinese. Emigrants from poverty stricken regions of China, many of which suffered from the strife of the Taiping Rebellion, seemed to be more willing to tolerate the living and working conditions on the railroad construction, and progress on the railroad continued.

[9] The Marina Bay Sands in Singapore will be a “grand slam home run,” Adelson said. “Asian people just love to gamble.”

[10]Chris Bates “The Gold Rush was an ideal parallel historical reference point to begin our exploration of today’s Crypto Rush.”

[11]Andreas Antonopoulos: “Centralization Is The Problem, Decentralization Is The Answer”

[12]This is an example of what is NOT “moral poker”


[14]Predominantly the Wire Act and the UIGEA

[15]Adam Smith The Wealth of Nations (audiobook)

[16]Ideal Poker, and The Wealth of Chips

[17]Ideal money

[18]Moral Poker

[19]Ideal Money:

“Starting with the idea of value stabilization in relation to a domestic price index associated with the territory of one state, beyond that there is the natural and logical concept of internationally based comparisons. The currencies being compared, like now the euro, the dollar, the yen, the pound, the swiss franc, the swedish kronor, etc., can be viewed with critical eyes by their users and by those who may have the option of whether or not or how to use one of them. This can lead to pressure for good quality and consequently for a lessened inflationary depreciation in value.”


In December, 2012, PokerStars was in discussions to buy the Atlantic Club Casino Hotel in Atlantic City, New Jersey, for $15-million. That was in anticipation of a new law–passed in February, 2013–that allowed the state’s land-based casinos to also offer online gambling. (In 2012, Delaware authorized online gambling, and Nevada created a regulated system.)

Baazov had a grand vision for the gambling industry and his company, too. In a June, 2013, interview, he talked about the importance of attracting or acquiring as many customers as you can. You then try to maximize revenue from each one with offerings in a full suite of “adjacent verticals”–land-based and online casino games, sports betting and so on.

[21]Chris Bates ” The completion of massive railroad, telecommunications, and banking systems in a relatively short window of time created a perfect storm of capital and opportunity to propel the U.S. economy into an epoch that dwarfed the productivity and innovation of the industrial revolution of the eighteenth and nineteenth centuries.”

[22]Nash Ideal Money:

“Psychological Considerations

A truly “Machiavellian” regime can rationally scheme to make the
citizenry of the state FEEL well served (at least for a relatively
short time period) independently of whatever might be most truly best
for them (as seen from an “Olympian” viewpoint). Here it can be noted
that if there is gradual inflation then there should tend to be more
and more “millionaires” as a fraction of the population. If instead
there were fewer and fewer of these then that might conceivably impact
negatively on the psychology of the citizenry.

It is also notable that there has been an overall sense of always
increasing human per capita wealth, globally, as technological advances
continue to modify the nature of the global economy. But consider the
effect of measuring wealth purely in terms of square miles owned per
capita of the earth’s land surface. If each Hopi tribesman owns x by
this measure and each Navaho tribesman owns y by the measure then, with
global population steadily increasing, should they feel happy or sad?

Perhaps humanity will REALLY arrive at increased wealth if we can
successfully colonize lands beyond Terra, like the surfaces of Mars,
the Moon, and some asteroids. (But of course we could not illogically
claim ALREADY to own the whole Solar System at least, so it is clear
that psychological alternatives enter here also with regard to the
issue of the “true” evaluation of per capita wealth.)

Possibly the full psychological effect of human “ownership” of the
surface of Mars would not be realized until that area had been divided
into plots regarded as the private property of specific corporate or
personal owners!”

[23]A Possible Cooperative Political “Poker Strategy” to Restore Online Gambling in the U.S.

[24]Former player turned Poker Stars Head of Public Relations Michael Josem on “NioNio”

[25]David Gzesh – Online Gambling: Bits and Chips Bitcoin 2013 Conference in San Jose, CA, May 19, 2013


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