Bitcoin (BTC) is unlike any other currency that is featured on Inside Casino. It is not even a currency in the traditional sense: it is a crypto-currency. Not many mainstream online casino sites accept Bitcoin yet. However, it is becoming more and more prevalent for online merchants to accept it as a legitimate form of payment.
Apart from the usual buying and selling of goods as a way to accrue Bitcoins, you can also “mine” for Bitcoins. This process involves using computer processing power or force in order to decrypt parts of the network. Once this is verified, it creates a block. This block is then grouped into a block chain, and finally added to the P2P database. Thus, new coins are added into circulation, and the successful miner receives 12.5 Bitcoins as a reward for their hard work. Or we should say the computer processor’s hard work.
It is a time and power consuming process to mine for Bitcoins, as the encryption key on transactions is highly advanced. In fact, if you do not have a specialist processor, then miners may find that they are spending more in electricity costs than actually accruing Bitcoin wealth.
At this stage, only a few online casinos in Canada allow players to deposit and withdraw Bitcoins. The Gambling Commission, although they do not outlaw it entirely, offer some cautious words on digital and virtual currencies in general.
For players, they stress the importance of ensuring that an operator is fully-licensed (something that you should do regardless of a site’s capacity to offer crypto-currencies). And for operators to legally offer such a payment option, they must satisfy anti-money laundering requirements as well as notify the commission if they update their payment processors.
So as far as the UK’s premier regulatory body is concerned, the ‘real-world’ value of crypto-currencies means that any online casino or iGaming site must be full licensed even if it relies exclusively on Bitcoin or any other block-chain based method.
Despite the increasing prevalence of Bitcoin and other virtual currencies, we would therefore advise consumers to be cautious when using digital currencies.
Though in some countries, the legality of Bitcoin is less certain due to government legislation, it is a valid currency in many others. Places like Russia and Argentina strongly regulate and in some cases ban the use of foreign currencies in general. Therefore, it very much depends on the country from which your chosen online casino is based.
Also, it’s not a fiat currency controlled or regulated by a government, a bank, or any such centralised financial institution. It is instead based around code, cryptographic hashes, and exists on a P2P (peer-to-peer) network. So where did it all begin for Bitcoin?
Bitcoin can be traced all the way back to 2009 and an enigmatic individual/group by the name of Satoshi Nakamato. Satoshi initially released a white paper entitled ‘Bitcoin: A Peer-to-Peer Electronic Cash System which set out how the crypto-currency worked. The proposed system was eventually unveiled as open-source software – the very first transaction was completed a year later when a ‘miner’ purchased two pizzas for 10,000 Bitcoins.
The introduction of Bitcoin was rather timely given that the global financial crisis of the mid to late 2000s was in full-swing. This is perhaps one of the reasons why the concept of a decentralised currency resonated with so many people. Unsurprisingly, alternative crypto-currencies began to emerge whose proponents attempted to improve and refine the original Bitcoin design.
Despite the competition, Bitcoin exploded in popularity as the idea of encrypted, ledger-based transactions began to take hold. There were a few bumps along the way though. In 2011, some 2500 Bitcoins were sent to invalid addresses.
Then in 2013, shortly after the value of a single Bitcoin reached $1000, its price began to plummet resulting in huge losses for investors. But it recovered spectacularly over the coming years, so much so in fact that today a single unit is worth a little under $10,000.
In spite of the tumultuous history of Bitcoin, this famous crypto-currency has given rise to a virtual economy that runs alongside our traditional financial systems. Many people have become rather enthused about using them at online casinos too, despite the warnings from regulatory bodies. Unfortunately, for players based in Canada, many are based overseas.
So before you decide to embark on a quest to find an online casino that accepts Bitcoin, there are a few things worth remembering. Let’s take a look at a few pros and cons.
Privacy – Although it’s possible to check your wallet address as part of a crypto-currency transaction, your personal details are not shared which means total anonymity. It’s therefore not possible for a third party to glean any information whatsoever should you decide to gamble with Bitcoin.
Secure – Because transactions do not require the submission of personal information, identity theft is not an issue. All that’s required is a wallet address and username.
Ownership – currently there are no laws regulating Bitcoin so it’s not possible for a Government to seize ownership of your digital money.
Attractive Promotions – a lot of casinos that accept BTC offer extremely generous bonus packages to attract crypto-based transactions. These can range from 1 to 5 BTCS!
Swift Transactions – While traditional payment methods can take up to three days to process, crypto-based transactions are very quick, regardless of your location. It’s usually the case that once an online casino authorises your transaction, you’ll be able to access your funds. With that said, it’s worth keeping in mind that transactions can only be performed once a current block has been processed. This can take anywhere from 10 minutes to a couple of hours. At worse, your blockchain deposit might take a day, which is still a lot better than standard payment options.
Lower Fees – Due to there being no middle-men or intermediaries, fees tend to be low. A small charge is however applied for your block to be mined although this is often pretty small. It might also be the case that an online casino that accepts Bitcoin will attach its own charges. Again, these tend to be very competitive given that most operators won’t want to put off customers, regardless of their chosen method of payment.
Volatility – Bitcoin, despite its value, is notoriously volatile because of the limited amount left, not to mention the massive demand. So it follows that the price can increase and decrease quite significantly. This should be taken into account, if you plan on investing in any sort of cryptocurrency, not just Bitcoin.
Technical Knowhow – Transferring crypto currencies into fiat currency is quite fiddly and requires a certain degree of technical know-how. It remains the case that wallet interfaces aren’t exactly intuitive so transferring funds successfully takes a bit of practice. Once you’ve learned how to do so, you’ve then got to get your head around transferring you Bitcoins to a casino.
Limited Acceptance – at the time of writing, only a few online casinos accept Bitcoin as a payment method. This may well change in the coming months. But as it stands, the options are quite limited.
Uncertain Legality – many countries have not approved the use of BTC at online casinos so there’s still something of a legislative grey area for a lot of operators.
No refunds – at present, it’s not possible to claim any sort of refund or chargeback when using crypto-currencies
Superior alternatives – the proliferation of rival currencies operating on improved block-chains means that Bitcoin isn’t quite as appealing as it once was for many punters.
Taking all of the above into account, here are a few facts about BTC that are well worth remembering.