Bitcoin is a virtual currency which is not handled or controlled by any centralized financial institution, but instead created by and for regular consumers and users. Bitcoins are not minted, neither are they created out of nothing like regular currency is; they are “mined”. To mine Bitcoins, users download a mining program that solves sophisticated algorithms and awards them with the virtual currency. The total amount of Bitcoins which can be mined is 21 million, after which it will not be possible to create more Bitcoins and the only way to obtain them will be by purchasing them.
To use Bitcoins, you have to have a Bitcoin wallet to handle in and outgoing transaction. The Bitcoin wallet provides a unique user id that only you will know. This id is used for receiving Bitcoins into your wallet and ensuring that no one else will receive the coins.
If you do not wish to mine your own Bitcoins, they can easily be purchased on a number of different Bitcoin exchanges online. These exchanges sell the Bitcoins at the current value they have and takes "real" money in exchange for the coins. Once you own Bitcoins, the transactions you will use them for are instant, which makes them ideal for online gambling use.
Bitcoins used to be most famous for being the currency used on the "Silk Road". The Silk Road was an online marketplace on the deep web, where you anonymously can purchase many different items. The silk road was closed by the FBI in October 2013.
Bitcoins has had many swings in its value, but has in recent time stabilized after the public has accepted the virtual currency and started to use it.
History of Bitcoins
Bitcoins were created in 2008 when a person known as "Satoshi Nakamoto" released his paper on the concept and a description of the Bitcoin. The paper didn't get any mainstream media coverage, but was a popular topic in internet forums, discussing its purpose.
In 2009 the Bitcoin network was created and released the first open source Bitcoin client, which could be used to mine the coins. Later that year the first block of Bitcoins were mined by Satoshi Nakamoto, with a total of 50 Bitcoins being created. This was just the beginning of the Bitcoin mining, as many more immediately began to start mining the currency.
In 2010 the first negotiations of the price for purchasing Bitcoins began, creating the first sale of Bitcoins ever. The same year a major vulnerability was spotted in the Bitcoin protocol, allowing people to create an infinite amount of Bitcoins. The bug was quickly discovered and resolved and the "fake" Bitcoins were deleted from the system. This is the only time there has been any big vulnerability discovered in the Bitcoin transaction system.
By 2013 Bitcoin had reached new heights, selling more than 1 million Bitcoins in a single month. The currency went from $22 per Bitcoin up to $278 at its highest points, because of the high demand for the currency. When the Bitcoin reached its highest level ever, the market suddenly collapsed and in a few hours went down to a value of $76 per Bitcoin, only to rise to $160. All of this happened within 6 hours and made people question how the value of the Bitcoin was really determined. To stabilize the currency, the leading Bitcoin exchanges decided to stop selling Bitcoins until the market had stabilized. This was a good decision as the Bitcoin since then has been more stable than ever in its value.
With mainstream media all over the new virtual currency, many financial institutions decided to accept Bitcoins as a real currency, creating legal obligations for companies receiving the currency as a payment method.
By 2014 the Bitcoin had gone up to $1,000 in value in the start of the year, only to fall to around $350-$450 at the end of the year. The Bitcoin is accepted with many merchants around the world and several online casino sites has been created around the cryptocurrency only. Regular casino sites however, have yet to embrace the Bitcoin on a larger scale, as only a few casinos have decided to accept Bitcoins or other cryptocurrencies.
Part of the reason for the lack of integration of Bitcoin as a payment method from regular casinos is due to regulatory issues. As the Bitcoin is decentralized and isn't really trackable, many regulators do not want to have sites under them using it, due to a fear of money laundering.
Bitcoins and Online Gambling
Bitcoins are not a widely accepted payment method, it's only being accepted in a few online casinos, poker and sports betting sites so far. However more and more online gambling companies has started to accept Bitcoins in recent years and many others plan to do the same. The Bitcoin is an ideal payment method for online gambling with it being anonymous for the sender and receiver as well as providing instant deposits and very fast cash out possibilities. The anonymity doesn't always apply to the site that you will play on, as most sites require you to verify your account before being able to do a withdrawal. Some sites like SealsWithClubs don’t ask for any personal information, making them a 100% anonymously site to play on.
The main issue with gambling with Bitcoins is that the value goes up and down depending on the market, meaning that if you play directly with Bitcoins, instead of getting them exchanged to real money at the deposit, you have to check their value to know exactly what you are gambling with. There are several sites online where you can check the Bitcoin exchange rate instantly so that you always know exactly what they are worth.
To use Bitcoins for online gambling all you need to do is to open a Bitcoin wallet and purchase Bitcoins. The Bitcoins will instantly be available in the wallet and can be deposited to gambling sites within a few seconds. When you want to do a withdrawal, simply request a withdrawal to your Bitcoin wallet and most sites will process the withdrawal within 30 minutes.
US Friendly Casinos and Bitcoin
Using Bitcoins is an ideal way of depositing and withdrawing for American players in online casino sites. Bitcoins are not regulated by any authority and can be purchased by all nationalities in the world, including Americans. Bitcoins are 100% anonymous and cannot be tracked back to any persons, which is why they have become super popular the last couple of years.
Not many US friendly casinos have integrated Bitcoins as a payment method yet, but many are planning to do so within a short future. The reason that many online casinos have yet to integrate Bitcoins has been because Bitcoins from the start has been seen as a non lasting currency. The opinion about Bitcoins has changed the last year and now the sites are ready to receive Bitcoins.
Many new casino sites have opened the last year, accepting real currency and Bitcoins or Bitcoins only. The problem in choosing a newly opened casino site to play on, is that it is not certain that they will last or that the games are fair and regulated. We believe in using established casinos, so that the risk of losing your money is very low.
Bitcoins can either be gambled with as they are or be exchanged to real currency upon deposit. There are pro's and con's in doing both and each individual casino site will create the solution that is best for them.
Bitcoins will continue to grow in the online gambling industry and especially for the US faced casino sites over the next couple of years.