TL:DR: A bucket shop is a device that has the appearance of a market. But unlike a real market, there is no price discovery and no delivery of the underlying asset.

Folks are invited to speculate, as if they are trading, but they're just giving away their money in a rigged casino.

What is speculation?, And why is it valuable?

Market speculators try to buy low and sell high, sometimes without ever taking possession of the underlying asset being traded. Their speculative activity contributes toward market liquidity and price stability. Speculators are crucial to functioning healthy markets and stable prices.

If someone wants to permanently rig a market to be volatile, it's important to siphon off the folks who want to speculate, and get them to go to a fake market instead, where their trading won't stabilize anything.

What's a bucket shop?

Bucket shops provide entertainment, like a casino, but they're usually sadder and it's often not a game of skill—but rather a killzone.

If allowed to flourish, bucket shops break access to free markets and sound financial instruments. They tend to be operated by shadier and more criminal elements until consolidated to a single entity.

Bucket shops kill the reputation and function of free markets. They hurt would-be investors, speculators and society at large, by not delivering on the promise of free markets.

Free markets enable the free exchange of goods at a fair price, and bucket shops don't deliver these benifits.

What is DELIVERY and why does it matter?

A financial contract like a future or a swap is generally either delivered or cash-settled, or something in between.

Delivery means the custody of the underlying asset is literally delivered, which could be digitally or physically.

If a contract is for oil or cows, and it has delivery, the holder of the contract will get oil or cows at the delivery date. If the future contract is for one bitcoin, it has to deliver instant access to bitcoin on-chain to satisfy the delivery requirement, which means it better be fully backed at all times.

With cash-settlement, the writer of the contract doesn't have to deliver the goods. They can take whatever the agreed upon price mechanism is and settle the contract for its cash value "to-market", or the current market price.

::waves hands:: They're the same right?

Well, NOOOO.

Delivery causes price impact and cash-settlement does NOT impact the market parice.

What is PRICE IMPACT or PRICE DISCOVERY?

Free markets mediate the transfer of a finite, limited, amount of stuff in the world.

If things are being traded on paper or electronically, there's a disconnect with delivery which can hamper price discovery. There can be an infinite amount of digital cows and infinite supply of paper bitcoin.

A financial contract with delivery mandates that the finite amount of stuff has to be procured, moved and actually traded as part of the contract.

When the seller of goods has to deliver the goods, it keeps them honest because they have to go get the thing they sold, at any price. If they never over-sold, they're golden; but if they sold more than they had, they run into trouble.

If a large contract is being satisfied from a limited pool of resources, delivery causes the price to rise. There have to be rules to prevent people from selling what they can't deliver, because one entity breaking the contracts they sold can end an exchange or an entire market.

If an investor believes gold will go up, so they buy a future, option or ETF with cash-settlment, without delivery, they've muted the money they were going to invest and also likely left the gold they were going to have in the market.

If a few million people buy gold ETFs rather than physical gold, they can't really complain if price never goes up as a result of their actions―because depending on the fine print, their money never went to the gold market or gold.

On the flip side, people can stake gold or bitcoins to get leverage, but ultimately, the way those instruments are constructed, it most often ends with folks losing their valuable asset, without it ever hitting the market or impacting the price. These leveraged instruments can be done in a centralized manner, or they can be programmed in a contractual swap on chain, or a tokenized swap contract.

Lifting property off someone that wants to profit without selling their asset can be as lucrative as taking cash from wannabe speculators. In a asset-settled contract, the one sided cash-settlement is denominated in the asset.

Even in the other direction, the delivery definition (or test) of a bucket shop holds. If someone is using gold to speculate on leverage on the price of gold, the dollars are never delivered.

But speculation is good! "Free trade"... right?

In the shadow copy of the market, speculation does not benefit the market or the outside world.

Bucket shops lower inflation, by taking money from dull people; but that money then flows to shady people.

Punters in a bucket shop are NOT providing liquidity to the market, they've removed their liquidity. Nor are they impacting price in a detached derivatives market, the price is dictated however the creator of the enterprise determined. Often the price ticker isn't really connected to the lit market (such as with CEXs that run their own flash-crashes). But finally, bucket shops quickly enter into direct competition with both free markets and broader financial instruments. The most unscrupulous folks take over the bucket shops and they will eventually attack and crowd out access to anything that's not their scam.

How to beat the bucket shop.

Real benefits come from real markets with real stakes.

If you want to benefit Bitcoin Cash, first, get the genuine article. Get a wallet, back up the seed, backup the backup, self-custody.

The easiest way to steal something, is to scare the buyer from taking delivery in the first place. Treat centralized changes like bathrooms: get in; get out―with your coins.

Don't buy anything wrapped on another chain, or a complicated side chain. Don't by coins on a binance chain. Don't EVER buy BCHG trust shares that can't be redeemed and don't have functioning price discovery. Coinbase's cash-settled BCH Futures don't deliver coins.

If you want stability, buy gold or silver, buy it with Bitcoin Cash. Bitpay has a list of bullion dealers. They'll give you a discount price and take your money, and deliver the goods. It's real. It's not scary. People buying bullion contributes toward price discovery.

If you believe in another crypto project, GO BUY IT! Then GO USE IT. If they have something real, that isn't a bucket shop or collectibles market, with genuine organic engagement, we can build anything here.

But we aren't going to benefit from markets in Bitcoin Cash if bucketters and their paid trolls and shills are given free reign to sabotage legitimate projects. Builders aren't going to want to talk about a product they made if a paid troll follows them around talking about masturbation in general BCH channels.

Bitcoin Cash doesn't need token auctions, or a storage market, or social apps, or yield bearing instruments, or futures, or better decentralized exchanges, or any kind of free market, if folks don't know the difference between a market and a scam.

Bucket shops close when folks stop putting money in the buckets. The criers stop shilling and the trolls go away when it becomes clear to everyone they're contra-indicators.