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Bitcoin is the virtual currency taking the online world by storm, and we’re sure it won’t be long until our favourite online casinos offer the payment method. However, one burning question lingers; is it safe?
The answer ultimately depends on where you play and pay with bitcoin, and since the cryptocurrency brings a high level of anonymity while being a speedy payment, we can see why many are interested. We take a look at the history of bitcoin, its rise in popularity in the iGaming industry, and whether or not bitcoin casinos are safe.
What is bitcoin?
Bitcoin is a cryptocurrency, which is also known as a virtual currency, that was created in 2009, but by exactly who is unknown. It does not need a central authority, such as a government or financial institution to authorise the payment and uses a public wallet along with a private key that only the user knows to pay for goods and services.
How does a bitcoin transaction work?
Bitcoin can seem like a difficult concept, but it is actually rather simple once you understand the basic way it works.
Bitcoin needs to be ‘mined’, and while it was originally available to be mined on any computer, you now need the special software. This is why there is a special group that oversees bitcoin transactions and they are called miners, who are paid in bitcoins for the process.
Coins obtained from the mining process are stored in a bitcoin wallet, similar to e-Wallets such as Neteller and Skrill only they store Bitcoins rather than real cash, and these can either be sold or used to pay for goods and services provided the payment method is accepted.
You can purchase a percentage of a bitcoin though many sites have a minimum, and you will find that you can use percentage of a single bitcoin to pay. For example, at the time of writing one bitcoin equals around USD $5000 (this can fluctuate quite significantly), and you can deposit from as little as 0.01 of a single bitcoin at many bitcoin casinos.
This may remain the same if and when the payment method is added to our favourite online casinos, though there is a minimum deposit here so it will be likely that it won’t be as low as 0.01 of a bitcoin, unless the value is incredibly high.
This value is likely to increase though, as there are only 21 million bitcoins in the world and once they have all been mined there won’t be any more left to mine, thus increasing the value. They will still be used as a currency however.
What does a bitcoin transaction look like?
A bitcoin requires a bitcoin wallet address and a private key, both consist of a random sequence of numbers and letters. The private key needs to be put in a secure place where only you can access it, while the public address can be viewed by anyone. People can view how many bitcoins you have, but they can’t access it – provided they don’t have your private key, which is why it is incredibly important to keep it safe.
To pay, or deposit in this case, you would send the bitcoins from your wallet to a bitcoin address using your private key, and the miners, which we mentioned above, would then verify the transaction by solving the block key using the special software.
It is a speedy process, but it can take up to 10 minutes for the keys to be solved so you may not see your funds instantly.
Is bitcoin anonymous?
Anonymity is considered to be one of the bitcoin currency’s best features. Bitcoin only broadcasts the public wallet address and no information regarding your name, or any other forms of identification including your location – so you can make a deposit without the online casino ever really knowing who you are. This also makes the whole process faster, since there is no need to verify your identity.
While we don’t condone this, it does allow for players who are in gambling jurisdictions that do not allow online gambling to make a deposit since there is no location details involved either.
The level of anonymity also has its drawbacks, however, including detracting from the level of transparency with online operators.
Are bitcoin casinos safe?
Just as online casinos can be rogue, so too can bitcoin casinos and unfortunately it is even easier if they only use bitcoin as you cannot trace them if they do disappear (due to the level of anonymity involved with the payment method).
While your identity is protected so is there identity and that is why it is incredibly important to do your research before playing at a bitcoin casino as you can effectively end up losing your bitcoins. If you can, we recommend waiting until our safe and reliable casinos offer bitcoin as a payment method so you don’t end up losing them.
What are other advantages of bitcoin casinos?
Since the miners get paid in bitcoins to mine and verify the transactions there aren’t any fees for the casino to offer the service, like there is when they opt to offer say Visa. This means the overhead costs are even lower than they already are so they can offer even better promotions than they already do.
However, as mentioned above it is incredibly important to only play at safe bitcoin casinos, if you can’t wait for our recommend sites to employ the payment method, which can be ensured by doing a simple Google search with the name of the Bitcoin casino and the term ‘rogue’ or ‘review’.