Online gamblers will likely be hearing a lot about Bitcoins, or BTC, in the coming months. Developed in 2009 by an anonymous entity calling itself "Satoshi Nakomoto," the Bitcoin is a revolutionary form of digital currency that breaks down international barriers by generically servicing people from all countries. Currency differences don't matter when Bitcoins are used. People in the United States can use them. People in Russia can use them. People in Cambodia can use them. It matters not where a person lives or what type of currency his country typically uses. Bitcoins are available to everyone.
Analogy: Bitcoins Are Like Casino Chips
When a table gamer enters a brick-and-mortar casino, he exchanges his money for chips. Whether that person's money comes in the form of Euros, U.S. dollars, or some other currency, the chips level the playing field by putting the same currency in every player's hand. In this way, all table gamers in a casino speak the same monetary language: Chips. The commonality of the chips makes it easy for players to bet and keep track of wins and losses.
The same is true for online gamers who use BTC. The coins level the playing field because they put the same currency in everyone's e-wallet. All BTC users are essentially speaking the same monetary language. Conversion rates no longer interrupt the flow of a gambling excursion. Wins and losses can be converted to a person's home currency at a time that is convenient for them.
One Bitcoin is currently worth about $140 in the United States. To determine how much a coin is worth in any currency, this 1:140 ratio may be extrapolated using other nations' conversion rates.
Coinbase and Blockchain: Two Ways to Buy BTC
Interested gamers may wonder how they can get their hands on these versatile coins. The process can seem a bit daunting at first, but once the steps become familiar, the task is rather simple:
First, a gamer must create an e-wallet where currency can be stored. Usually all that is needed for this process is a few minutes to set up an account and a password. Second, the gamer must log into the e-wallet and obtain his Bitcoin address. Addresses contain up to 36 characters and begin with a “1.” Third, the gamer should visit the Coinbase or Blockchain website, enter their address, and select the “deposit with cash” button. This button allows consumers to purchase Bitcoins.
Offshore Gambling: Circumventing the Law
BTC transactions are person-to-person. No bank or other financial institution is necessary for two people to interact with this currency. Because of this, the coins have been used for some criminal activities, such as the buying and selling of illegal drugs.
Americans wanting to circumvent online gambling laws have been known to gamble at forbidden offshore casinos by using the coins. Basically, the electronic currency is deposited with offshore casinos via a person-to-person transaction that is untraceable by law enforcement. Because Bitcoins are legal tender, it is virtually impossible at this time for a user to be prosecuted for using them.
Poker and Dice
Right now, BTC gambling is most popular with online poker and dice sites. Well-known for its acceptance of the coins is SealsWithClubs.com, a popular online poker site. Because it deals in this versatile currency, the site is able to accept poker players from anywhere in the world.
Dice sites such as SatoshiDice and PrimeDice also accept the coins. Players like using the electronic tender for these sites because a mere service fee of one percent or less is charged for each transaction.
Other Types of BTC Gambling
Poker and dice aren't the only games that make use of this financial technology. A long list of online casinos now accept BTC. In addition to poker and dice sites, this list includes a number of slot casinos and sports betting arenas. A simple Google search for compatible gambling websites turns up a healthy list of gaming options for the interested online gamer.
Refreshing Advantage: BTC Games Cannot Be Rigged
Sites that use Bitcoin cannot rig their games because the currency's software is “open source,” meaning anyone can review it at any time. The reassurance that online poker and dice games cannot be rigged is refreshing and reassuring to those who might be hesitant to risk their money with an online gambling company.
Government Problem: How to Tax Anonymous Users
Many governments today depend upon their gambling industry to generate much-needed revenue. Some countries have actually legalized gambling for the sole purpose of collecting revenue in a depressed economy; others, which have always been excluded gambling from their culture, are going to do in the short term (read this). Unfortunately for these governments, Bitcoin transactions make it harder to collect online gambling revenue. The reason for this is that BTC transactions, because they are typically anonymous, are nearly impossible to tax. Even though all data is available for outside parties to peruse, no names are attached to the data. Auditors can see how much money is flowing in and out of peoples' pockets, but they cannot determine exactly who is making and losing money.
Is Bitcoin Illegal?
Because Bitcoin provides gamblers a way to circumvent certain laws and even taxation, some might speculate that the currency is illegal. The tender is not illegal, however; the Financial Crimes Enforcement Network has made it known that coin users violate no known laws. The possibility for money laundering does exist, however, and the industry is currently under the surveillance of the network to ensure legal compliance.
Lost Information: One Big Disadvantage
Bitcoins are like cash in that they become lost forever when stolen. The threat of computer hackers stealing a person's coins is real, and unlike fraudulent credit card transactions, the perpetrators are not easily caught. Online gamers who use this financial technology should always proceed with caution, using only trusted sites for their online gambling adventures.