5 Basic Facts to Know for Betting at Bitcoin Casinos
Nov 20, 2014
Bitcoin is taking the world by storm. Before you get caught up in the hype, here’s the straight story about using Bitcoins to bet in online casinos.
You can use a lot of adjectives to describe Bitcoin. We especially like the term resilient, because as often as naysayers like Warren Buffet and Nouriel “Dr. Doom” Roubini predict its coming collapse, the innovative digital currency simply won’t go away.
The popular new way to make purchases online has weathered the Mt. Gox scandal and is now accepted by online retailers like Overstock and Virgin. If that wasn’t enough to catch your attention, it’s also an easy, convenient way to make payments at online blackjack casinos in Malta, Gibraltar, the UK and elsewhere.
#1: Bitcoin is a “cryptocurrency”
Whereas fiat money like US dollars, British pounds, euros and South Korean won is physically printed (or minted) then funneled into the economy, Bitcoin has no physical existence whatsoever.
It is the product of complex data encryption called “mining”; in essence, a Bitcoin is a piece of densely packed information. Bitcoins cannot be physically stored like other currencies, which is why some people are wary of investing in them.
They are usually stored electronically in dispensaries or “Bitcoin banks.” However, the hacking of Mt. Gox, which led to millions of dollars worth of Bitcoins to disappear, has led many people to store their coins offline in hard drives.
#2: Bitcoin is traded like any other currency
Bitcoins may not be a physical object, but they have an exchange rate, are convertible into other currencies, and are traded on financial markets.
Many financial traders are interested in dealing with Bitcoin because: A) It is not printed but “mined,” so there is no risk of the supply increasing rapidly, and B) The exchange rate fluctuates, and traders have been able to make large sums of money by anticipating the ups and downs of the market.
The exchange value topped at almost $1,200 per coin in December, 2013 before falling to below $300 after the Mt. Gox debacle. It now currently sits at $388, so those who were wise enough to snatch it up after Mt. Gox have been able to make a pretty penny.
#3: Bitcoin is widely accepted
The average online casino player either doesn’t know what Bitcoin is or doesn’t where they can use it. The reality is that Bitcoin can used to make deposits at quite a few online casinos, sportsbooks, lotteries, betting exchanges and mobile casino gambling sites.
A select group of sites deal exclusively in cryptocurrency for both deposits and payouts, while still more accept it in addition to standard payment methods like bank transfers, credit cards and e-wallets.
Some popular Bitcoin casinos include Bitlotto, switchpoker and bitzino. It appears that the majority of gaming sites accepting Bitcoin specialize in poker.
The popular online casino in Malta Vera & John accepted Bitcoin for some time but earlier this year announced that it cease dealing in the digital currency for the time being.
#4: Bitcoin streamlines how we do business online
While the technology may be very complicated, the digital currency makes the process of depositing online much simpler. Because it is a cryptocurrency and not an official money there is no need to convert it into the casino site’s preferred currency.
In addition, the world of Bitcoin casinos is not as highly regulated as that of online casinos dealing only in traditional currencies.
This can often make things easier for the player. For example, sites using the digital currency usually charge no transaction fees and have no daily limits on either deposits or withdrawals. Bitcoin casinos’ online bonuses can also be more lucrative than others.
#5: It’s more anonymous
Many online gamblers prefer to deal in Bitcoin because the cryptocurrency has anonymity that only payment methods can’t come close to. Depositing money via bank transfer, credit card or e-wallet creates an inerasable paper trail to the player’s identity.
This restricts individual privacy as well as potentially puts them at risk for fraud or identity theft. Remember how nervous online gamblers got during the Heartbleed scare earlier this year?
When a player makes a deposit in Bitcoin, there is absolutely no way of tracing those coins back to their personal identity (that is, unless they have their e-coins specially marked as a defense against theft).
While most internet users see this as a positive, some online players despise it because it doesn’t afford much protection against player fraud or cheating. When you’re competing against another person, you want to know who they are. With Bitcoin, that’s difficult to ensure.
#6: Bitcoin casinos can’t operate legally in the US, UK or Canada
Most Bitcoin casinos are operated from small offshore jurisdictions, as the larger gambling markets have hesitated legalizing them due to the difficulty of regulation. In the case of the US, to be fair, online gambling is generally prohibited regardless of payment method.
While this is somewhat of an inconvenience, policymakers in the US and Japan have already talked about developing regulations for transactions using the digital currency.
Our guess is that as Bitcoin sticks around and become more commonly used, more governments will get around to accepting its use on a legal basis.