Bitcoin and other cryptocurrencies have been around for some time now, but most people still don’t understand how they work. For most people, their money is a number that is spread over several banks and financial accounts. When we choose to use actual physical money in the real world, we withdraw cash in the form of notes and coins.
Cryptocurrencies are the ‘notes and coins’ of the internet in that they can be sent directly to other people and merchants. This means they can be sent with zero intervention by banks and other financial institutions. This makes Bitcoin and other cryptocurrencies attractive to people who have problems getting money into their online casino accounts.
A Brief History of Bitcoin
The origins of Bitcoin (the first cryptocurrency) is somewhat shrouded in mystery. The idea of a peer-to-peer currency (money that can be sent directly from one person’s computer to another without the need to use any financial institution) first arose in 2008, proposed by someone called Satoshi Nakamoto. ‘Nakamoto’ (who has never been identified but now is thought to be a small number of individuals instead of one person) created the code for the creation of Bitcoin in January 2009.
The first Bitcoin had very little value, but by 2011 a Bitcoin was worth about $0.30. By mid-2012 the price had risen to $16.41. By the end of 2020, this highly volatile currency had reached $23,000 per coin.
Bitcoin transactions are maintained in an online ledger called a Blockchain. Computer software is used to enable Bitcoin transactions, and as a ‘reward’ people who process the transactions are awarded Bitcoins – this is known as mining. In the early days of Bitcoin being a Bitcoin miner was highly lucrative, but these days there are so many Bitcoin transactions someone would have to process billions of them to earn a single Bitcoin.
Online casinos in jurisdictions where payment methods are highly restricted (such as the USA) tend to accept Bitcoin. Doing so bypasses the need to involve ‘real world’ financial organisations such as banks and credit card companies.
Bitcoin – Pros and Cons
- High levels of anonymity (but not complete)
- No need to involve your bank or credit card company
- Can be used for deposits and withdrawals
- Transactions are instantaneous
- Not many online casinos accept Bitcoin.
- You need to take extra steps to use this cryptocurrency.
- Bitcoin is highly volatile.
How to use Bitcoin at Online Casinos
Bitcoin is ‘real money’, but it exists as computer bytes. In the ‘old days’ people used to store Bitcoins on their computers, but if the computer’s hard drive failed or the computer was lost or stolen, the Bitcoins were lost too and could not be recovered.
In contemporary times most Bitcoins are stored in the cloud. They still exist physically but on an unknown server at an unknown physical location. The company owning the server takes responsibility for the preservation of the Bitcoins. The owners of the Bitcoins can access them using a piece of software known as a wallet.
If you want to use Bitcoin at an online casino, you will need to get yourself a Bitcoin wallet. There are several companies that you can set up your wallet with. Creating a wallet is usually free – the companies make their money by making tiny charges for every Bitcoin transaction you make.
When you have your Bitcoin wallet, you will need some Bitcoins to put in it. This can be done via your Bitcoin wallet provider. You can request to ‘buy’ Bitcoins in your native fiat (i.e. non-crypto currency) currency. You are really just exchanging one type of currency for another, just as you would if ‘buying’ currency to use in a country you are about to visit.
The final step is to get the Bitcoins into your online casino account. The online casino that accepts Bitcoins will have their own Bitcoin wallet, which can be identified by a long string of random letters and numbers. You use your Bitcoin wallet to enable the transaction, entering the amount of money you want to transfer and the casino’s wallet address. The process should hardly take any time at all. Withdrawals can be processed in the same way – you give the online casino the address of your Bitcoin wallet so the money can be transferred into it.
When you use Bitcoins at an online casino, you will find they are automatically converted to the currency you have chosen to use there. When you withdraw, they are converted back into Bitcoins.
Many people are under the false impression that Bitcoin transactions are anonymous. This is untrue – your Bitcoin wallet can still identify you. Plenty of people using Bitcoins for illegal purposes, such as buying and downloading illegal pornography, have been identified via their Bitcoin transactions.
Not many people understand how Bitcoins and other cryptocurrencies work, but that’s hardly a problem. Bitcoin is just like any other currency except that it can be used without any financial organisation’s involvement.
If you live in a jurisdiction where getting money into an online casino is difficult or seemingly impossible, then Bitcoin could be the solution to your problem. You should be able to find a casino within your jurisdiction where bitcoins are accepted.
Bitcoins may seem ‘unreal’ instead of dollars, pounds or euros, but it still counts as real money. If you use Bitcoin at an online casino, then you still need to practise responsible gambling at all times.
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What is meant by Bitcoin being a ‘volatile’ currency?
Do I need to pay for Bitcoin transaction?
How long do Bitcoin transactions at online casinos take?
Are Bitcoin transactions legal?