Bitcoin can be an intimidating concept but due to the increasing interest in the virtual currency it is becoming more likely it will be a popular payment method at online casinos for players to use instead of real money.
Online casinos with bitcoin deposits
Many still don’t know what Bitcoin is, but due to the increasing prevalence of the digital currency it is a good idea to learn what it is, how it is used, and the potential future of bitcoin in terms of online casinos. Some online casinos have popped up running solely on Bitcoin, while there is also a chance Internet casinos will offer Bitcoin amongst the other payment methods available. Therefore, it’s important to understand Bitcoin as a payment method.
History of Bitcoin
Bitcoin is an interesting concept. It is money which is exchanged via a medium known as cryptology and is basically just an alternative currency to real money. In other words Bitcoin is a digital currency which isn’t at all like real money. So unlike the Australian Dollar it does not have a central financial institution, rather it operates via a peer-to-peer network.
It was a concept originally brought to the forefront in 1998 by Wei Dai, who suggested the new currency shouldn’t work via a central bank. In 2009, it was published by Satoshi Nakamoto, though he left the Bitcoin development in late 2010. Since then, many developers have worked on it.
Since Nakamoto remained quite anonymous, Bitcoin has never really been explained on a large scale so many do not understand how it works. Regardless, its legacy continues to grow and there are an increasing number or organisations, including online casinos, which are accepting bitcoins as a payment method.
What is Bitcoin?
If you’re still wondering what exactly Bitcoin is we will try our best to explain the concept. Real cash requires government authority to decide how much, and when, the money can be printed. Bitcoin however, has a limit of 21 million Bitcoins, and should be viewed as gold is – value is determined because it is scarce and more cannot be created.
Bitcoin is sent via a peer-to-peer network, and when the Bitcoin is sent to make a payment, such as an online deposit to a casino, there is no requisite that a bank has to authorise it. So when you pay with Visa your financial institution, not Visa, authorises it or denies the transaction depending on their gambling policies, for example.
With bitcoin, there is no organisation which has to authorise it for it to go through; rather, miners just confirm the transaction – a concept we will explain below.
How does Bitcoin work?
The best way to view Bitcoin in its most basic form is by seeing it is an electronic currency which has substantial value and can be stored, sent, and received between other Bitcoin users. If you want to get into the nitty gritty, there are a few components which work via a Bitcoin system.
Bitcoin block chain: The Bitcoin sharing system works on a block chain, which is a public ledger that records every transaction ever processed in order to verify new transactions. This ensures there is a level of security involved and fraud cannot occur. Additionally, the block chain can be viewed almost as a receipt of the transaction and is created when the Bitcoin wallet and private key, two concepts about to be discussed, are used in conjunction.
Bitcoin wallets: The Bitcoin system requires a Bitcoin wallet, which can easily be created on your desktop, laptop, tablet, or smartphone. Here you create an address, almost like an email address, where you can exchange Bitcoins. It sounds very similar to an e-wallet but there are differences including the fact that every transaction creates a new address, rather than using the same one. These addresses are public, however the Bitcoin being sent via these addresses also uses a key which is private.
Bitcoin private keys: A private key can be viewed as a pin you use when verifying the transaction. However, specifically it is data which prevents anyone from being able to change the transaction. This transaction will then be added to the block chain and can be approved and verified within 10 minutes. When the public address and private key are used together, they compliment each other and are almost like an answer to a mathematical problem. These transactions can be processed by anyone with a computer that has the required special hardware and these people can be rewarded for this service. This service is known as mining which we will go into detail below.
Mining is a process which involves people, known as ‘miners’, verifying the bitcoins transactions. Mining sees the transactions confirmed in a chronological way in order to add it to the block chain to create a level of protection and security. It is best to understand mining as users who use their computers to verify transactions and these users are rewarded with bitcoins as a fee and this fee is equivalent to how much power they use to mine in the peer-to-peer network.
If you want to know the nitty gritty of the mining process, there is a lot of information on the web. A basic breakdown is as follows: they use a set of calculations in order to approve and confirm the transactions. It was originally quite profitable to be a miner with the standard desktop computer, but now many have weighed up the cost of electricity which is required to mine to be greater than the bitcoin value. That is why miners use special hardware which can perform the mining economically.
Is there a transaction fee with Bitcoin?
There is a default fee for paying with Bitcoins, but while there are many bitcoins still available to be mined it so small no one really notices. However, once all the bitcoins have been mined this fee will increase as an incentive to continue to process transactions.
Paying with Bitcoins is a faster payment method than anything available and you can also pay a higher transaction fee to get the transaction processed quicker. This is because miners get the fee and obviously will work faster and place more importance on the transaction for a higher incentive.
Can I fund my online casino account with Bitcoin
Now you know what bitcoin is, we can imagine you’re ready to pay and play with the virtual currency. While there are some Internet casinos that accept Bitcoin, many don’t including our recommended online casinos. There is potential though for these online casinos to adopt the payment method so we advise to keep playing here to ensure you aren’t compromising your safety and eventually you could be paying with Bitcoin.
The reason why we think many online casinos will begin to adopt Bitcoin is it’s so appealing to online operators. Since the fees are virtually non-existent, it allows the online site to offer even better payouts, and if playing at reputable online casinos which already offer great payout rates, this only means good things for us as players. Bitcoin also allows online casino players the option to be anonymous and players will not generally be required to provide our real name and home address for funds to be processed.
How to get Bitcoins to use at online casinos
When online casinos, including the many we recommend, begin to offer Bitcoin as a payment option we need to have Bitcoins to use. Firstly, download a Bitcoin wallet. Coinbase is a good one. Click ‘New’ to be given a wallet address which is made up of numbers and letters. Many recommend to store a Bitcoin wallet on an external hard drive, because if your computer dies then your wallet and the Bitcoins die with it (they can’t be redistributed or obtained again).
Once you have your Bitcoin wallet up and running, you can buy or earn Bitcoins to store in your wallet. To can buy these via real money and use your bank account to pay, or you can earn them by joining a pool where you will be awarded in blocks by solving an algorithm. Once you have Bitcoins in your wallet, you will be able to choose this option on the banking page and make a quick and easy deposit.
If you really can’t wait for an online casino to offer the Bitcoin payment, there is currently the Bitcoin powered game known as Satoshi Dice, which sees players betting and earning only Bitcoins. Remember, the Bitcoin market can fluctuate so sometimes they aren’t worth as much as other times. It is important to keep an eye on this. Also, other Bitcoin companies are beginning to pop up such as Litecoin and Dogecoin, which is causing great debate in the Bitcoin community as to whether this impacts the value of the Bitcoin.
Is Bitcoin safe and legal?
There isn’t really a regulatory framework behind Bitcoin and even users in illegal gambling markets such as the US can use Bitcoins to play online since funds cannot be frozen the same way they can if using real money as it is authorised by a central bank.
In Australia, it’s legal to use Bitcoin but it could see some players playing at Australian online operators without any penalty for the operators despite being illegal, just as US players can do. We recommend continuing to play at our suggested online casinos to be safe and we are sure they will offer Bitcoin eventually, provided it is worthwhile.
There was an inquiry conducted late 2014 in Australia to create a framework for Bitcoin, however it has resulted in many seeing Bitcoin as a phenomenon unable to be regulated. Players should always play at a safe and reputable online casino.
If you really do want to play with Bitcoin now, do your research on the online casino to ensure it isn’t rogue. Otherwise continue to play at reputable Internet gaming establishments such as the many we recommend until the payment method becomes available.
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