What is Bitcoin?
Now, if you’re completely new to cryptocurrency, you will probably have known about it because of Bitcoin. For the lay man, Bitcoin is an electronic currency and, for all practical purposes, this is not wrong at all.
But Bitcoin’s prominence lies in it being a cryptocurrency that operates via a peer-to-peer digital payment system. Cryptocurrency is defined as such because of the currency’s design that uses cryptography to secure transactions and to control creation of new units. Cryptography is simply a method for encrypting and decrypting data, with cryptocurrencies, data is stored and transmitted using methods that ensure only those intended can understand and process it.
Interestingly, Bitcoin actually wasn’t the first cryptocurrency! Bitcoin was partly modelled around the ideas of “b-money” in the late 1990s and Bit Gold years after that, themselves electronic currency utilising cryptographic protocols. Bitcoin itself only entered the scene in late 2008, with the first ever units created in early 2009.
So, while Bitcoin is seen as the father of cryptocurrencies as we know it, it is in fact the prodigious child of many fathers (or mothers!).
What’s unique about Bitcoin
What made Bitcoin special if it wasn’t the first? Why didn’t earlier concepts succeed? Actually, earlier concepts did take off, only to eventually fall foul of regulatory efforts as governments stood up and took notice. You know how Bitcoin is frequently associated with terrorism, drugs, money laundering and every other nefarious activity you can name? This happened with almost all electronic currency before Bitcoin too.
But Bitcoin distinguished itself from its predecessors by being decentralised, removing the need for users to trust a central entity. While this may not seem like an appealing feature at first, this crucial feature of Bitcoin implies that it is not issued, created or controlled by any authority. In theory (and so far, in practice), this would make it impervious to any threats of manipulation or interference, whether by banks, goverments or even hackers.
Bitcoin: the numbers
Here is a snapshot (as of 14 June 2017) of the Bitcoin cryptocurrency.
- Date of launch: 3 January 2009
- Unit cap: 21 million
- Total units in circulation: 16.3 million
- Price (USD): 2,550
- Market cap (USD): 42.2 billion (ranked #1)
- Average daily transactions: 280,000
- Daily tweets: 43,000
- Website: bitcoin.org
How does Bitcoin compare to other cryptocurrencies?
Bitcoin’s innovative introduction:
It was the first-mover, the first blockchain.
Bitcoin had a huge head start over everyone else. In fact, any other cryptocurrency created after Bitcoin is referred to as alternate cryptocurrencies, usually simply called altcoins.
There are infite ways to compare (okay, not infinite, but more than enough to fill volumes) cryptocurrencies, but we’ll try and boil it down to a list of practical reasons that would matter to the normal user, like you and us.
Also, because this is ultimately a gambling guide, we’ll use a list of four major altcoins that are accepted by crypto gambling sites, namely Ethereum (ETH), Dogecoin (DOGE), Litecoin (LTC) and Monero (XMR).
According to a 2016 Rutgers research, there is still a persistent fear of using Bitcoin among people who have never used Bitcoin before. However, if you forget about the geekiest, deepest technical workings of the network, getting and owning your first Bitcoin is a process that’s probably easier than opening a bank account.
For one, you don’t need to register anything to get a Bitcoin address and/or wallet. For many newcomers as well, faucets were their source of first Bitcoins and tapping a faucet can be as easy as entering your Bitcoin address and solving a Captcha.
More advanced users will want more control over their coins and choose more secure wallets. It then gets slightly more complicated here as you’d need to do more than remember a password – create wallet back ups or remember your seed and private key, for example. That said, more advanced wallets allow you to do a lot more with Bitcoin: sending signed encrypted messages, for example, to prove your identity or decide your own transaction fees.
Only 21 million Bitcoins will ever be produced but today, almost 80% of that amount has already been created, with most of it in circulation. Because many merchants, exchangers and people first adopted Bitcoin when it comes to cryptocurrency, Bitcoin currently is, by far, the most accepted, most available, and most in demand cryptocurrency. It’s also the most exchanged cryptocurrency, and many people or exchangers will accept a vast array of payment methods. Yes, even credit cards and Paypal.!
If you wanted Bitcoin right now, you could obtain it in as little as minutes.
2. Development (and potential)
The Bitcoin network is currently maintained by volunteers, with some 100 so-called Core developers contributing to its code. The Core developers, however, are sometimes criticised for their extremely conservative outlook on development, insisting on strict testing and labourous peer review for all proposed improvements to the network.
Critics say that this process has stifled development, particularly with regards to Bitcoin’s scalability, with the current network’s capacity for processing transactions overstretched more and more frequently in recent years, causing delays of up to days to confirm some transactions.
Nevertheless, their cautious approach is appreciated by many who believe that these developers know best and will continue to serve Bitcoin’s best interests without compromising the networks’ security.
Despite Bitcoin’s continued time in the limelight and the fact that it has almost breached the $3,000 mark, there are enough people who believe that it has the potential to replicate its astronomical success in multiplying its value a thousand fold (yes, many believe the million dollar Bitcoin is only a matter of time).
And while technological improvements may always lag behind the scaling effect, this has not eroded Bitcoin’s reputation as the most stable cryptocurrency in a basket of volatile alts.
3. Adoption (and popular support)
As mentioned before, if you’ve used crypto, then you’ve probably used Bitcoin first. A 2017 Cambridge study estimated conservatively that there were 2,9 million unique cryptocurrency users, based on wallet usage, of which the majority were Bitcoin.
While that’s just about 0.03% of the world’s population, in terms of a young technology, this still represents a small nation! Users tend to be politically and economically aware, or at least concerned and are drawn to the early libertarian concepts of Bitcoin. As people’s trust in the banking industry wanes, attention to alternative finance and decentralised currency can only grow.
When you’ve got Bill Gates saying you can’t stop Bitcoin, Donald Trump trying to clamp down on it and Goldman Sachs bowing to mounting pressure to report on it, then you know Bitcoin is not only here to stay, it’s going to be here for a very, very long time.
How does Bitcoin compare in terms of gambling use?
The sheer traffic going through the Bitcoin network now means you have to be aware of how many unconfirmed transactions there are during the time you wish to transact. It’s probably the only cryptocurrency now where you have to actively monitor the network to save time and money (transact at low peak, and use an effective fee rate).
The other issue is you have limited means to control how much casinos will pay as fees when processing your withdrawals. Some allow for fast withdrawals at higher fees, while others don’t have a way for you to adjust that. This has also led to some cases scams, as the long delays in confirmation opens a window for double spending (you’ll see your transaction in the blockchain but it will never confirm).
There are some ways for you to try and speed up confirmations after the transaction, but few are free and most will cost you some money and hassle.
Bitcoin is probably the costliest of all cryptocurrencies when it comes to transaction costs, because of its current inability to scale to demand. You have to pay fees every time you deposit to a casino, and at peak times and for a large amount of data (the size of your “input”), you might end up paying a sizeable fraction of your transaction as fees. These tend to be quite high nowadays (no less than 120 satoshis per byte if you want to avoid waiting for hours).
We’ve also found that at some casinos offering fast withdrawals at a higher fee, you can spend as much as 0.002 BTC for a withdrawal (almost $6 at time of writing)!
Bitcoin isn’t actually as anonymous as you might think. All transactions are recorded on a public ledger against visible addresses. The moment you give out your address, anyone can track how much you own, which addresses you’ve received from and which you’ve sent to. For the average user, however, this isn’t really a problem, unless a casino payout’s address is known and you’re trying to keep your gambling hobby private!
OK I’m interested in Bitcoin! How do I start?
First, get yourself a Bitcoin wallet. A wallet is where you will store your Bitcoin. Depending on the security you want and how you want to access it, there are several to choose from.
Some options are:
- Software wallet stored on your computer: Exodus, Electrum
- Online, web-based wallet and app: Coinbase, Xapo
- A hardware “cold” wallet: Ledger, Trezor
Where do I get Bitcoins from?
Since this is a gambling guide after all, we’re going to assume you want to buy some Bitcoin, as opposed to earning or creating them (a process called mining) yourself. Here are some exchanges you can obtain Bitcoin from:
- Localbitcoins.com Bank transfer, cash, Paypal
- Coinbase.com Credit, debit card
- Coin-mama.com Western Union, credit card
- Bitonic.nl SEPA, iDeal
- Paxful.com Gift card, cash deposits, online transfers, debit/credit cards
Finally, I’m ready to gamble my Bitcoin! Show me 5 gambling sites that accept Bitcoin today
If an online casino accepts cryptocurrency, chances are, it definitely accepts Bitcoin. With everyone rushing to embrace the brave new world of cryptocurrency, there’s no shortage of casinos that’ll let you gamble you Bitcoin, one way or other.
With no particular preference:
If you’re trying out Bitcoin gambling for the first time, you’ll be interested to know that some of the very first Bitcoin gambling games were all about dice! With Pocketdice, you’ll be introduced to this simple yet addictive game using Bitcoins to predict the outcome of two dice rolls. You’ll also be shown the concept of “Provably Fair”, something unique to crypto gambling that lets you verify for yourself the games you’re playing are fair.
It’s a site that’s all about Bitcoin and has a forum you can talk to others while you’re at it. They’ve got 7 simple games to try out, you can play immediately with no registrations. Try out the more advanced Dice game here to understand what Bitcoin dice is all about!
A US citizen? A lot of casinos won’t let you in? Then try out “the most trusted Bitcoin casino of the USA”. They’ve got slightly high minimum deposit (0.01 BTC) and you better be prepared to wager that 5 times before you can withdraw, but this is the place to go if you want to place that looks more like a typical online casino: lots of slots, table games and a healthy number of bonuses.
4. Americas Cardroom
Thinking of trying your online poker face with Bitcoin to complement? Then try out Americas Cardroom for regular tournaments and the chance to win a trip to their annual poker tourney in the Dominican Republic. They even accept fiat if you run out of Bitcoin.