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Bitcoins – Understand how bitcoins are used for online casino gambling

Bitcoin is the most popular digital currency. It is also referred to as virtual currency or cryptocurrency. Some of the other digital currencies are Litecoin and Dogecoin, but these are far less popular. Bitcoin differs from normal currency, like US dollar, in two important ways. There is no physical equivalent. While you also have currency notes and coins for various denominations of the US dollar, bitcoins can be stored, traded and used only online. The US dollar is regulated by the Federal Reserve System. There is no national or international agency that regulates bitcoins in a similar manner.

The bitcoin payment system was invented by an unknown person using the alias Satoshi Nakamoto in 2008. It was released it as open-source software in 2009. The transactions take place between users directly, without any intermediary. But each bitcoin transaction is verified by network nodes and recorded in a public distributed ledger called the blockchain. It is completely safe and transparent system, whose usage is increasing rapidly. A year ago there were only 1,000 online merchants that were accepting bitcoins and in 2016 the number has grown to 10,000. There are 15.68 million bitcoins in circulation.

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How do you go about buying bitcoins?

The simplest way of acquiring bitcoins is to purchase from online bitcoin exchanges by paying in US dollars. There are several such exchanges available. Some of these like CEX.IO and BTC-E deal in the regular currency exchange as well. Exchanges like Coinbase and Bitstamp as yet handle only bitcoin-US dollar transactions. 1 Bitcoin is currently equal to about $625. This exchange rate may surprise many US online casino players. The supply of bit coins is limited and hence this high exchange rate. You will find that most bitcoin online casinos transact with milli-bitcoin as a unit, which is a thousandth of a bitcoin.

You can also acquire bitcoins by selling goods and services online. These work just like E-bay. You put up your item for sale quoting the price in bitcoins. When the item gets sold, the online market platform will remit your funds in bitcoins to your bitcoin wallet.

The primary generation of bitcoins is through an activity called mining. This is a kind of payment processing work involving large number crunching. Users employ their computing services to verify and record payments into a public ledger. You can sign up at one of the enterprises that carry out this activity and earn in bitcoins.

What are bitcoin wallets and how do I get one?

You may be familiar with regular currency electronic wallets like Neteller and Skrill. Bitcoin wallets are exactly the same, but handle only bitcoins. They are online accounts into which you can deposit bitcoins acquired in any manner described above. If you are purchasing bitcoins from an exchange, you have to give your bitcoin account number and the bitcoins will directly be transferred there. Then you can use the bitcoins to make deposits at online casinos or even purchase other goods and services online.

There are several bitcoin wallets available and you have to choose the one that suits you best. You need to be careful in making a selection, especially if it is the first time you are dealing in bitcoins. One way of going about the task is to go through the popular bitcoin casinos recommended by us and see which are the common wallets supported by them. Take your pick from those. The best bitcoin wallets will be compatible with all desktop and mobile operating systems, but this is something that you will need to confirm. Most bitcoin wallets offer demos and tutorials on opening an account and you should go through these carefully before actually starting the process.

What is provably fair gaming?

Provably fair gambling is a system prevalent in bitcoin casinos that can prove that the online casino has not altered the software after the player has placed his bets. It uses a mathematical concept called cryptographic hash functions, which is the core of bitcoin technology.

Online casinos generate a gambling outcome through a random number generator. For each event, like the spin of a roulette wheel, the random number starts with a “seed”, performs complex operations on it and delivers a random outcome. At provably fair bitcoin casinos, the process works as follows. The software creates a secret random seed, which is hashed and sent to the player. The player inputs his own random client seed. The two seeds are used to generate the random outcome. The actual software seed is revealed to enable the player to verify that it matches the hash. This is a simple representation of the process, which may be slightly different at different bitcoin online casinos.

What are the advantages of playing at online casinos using bitcoins?

The biggest advantage of playing at online casinos using bit coins is total anonymity. You can open a bitcoin account using a pseudonym and therefore transfers to online casinos cannot be traced back to you, as they can in the case of credit card, bank transfer or even regular e-wallet deposits. Bitcoin is an unregulated and globally used currency. There are no national financial laws to worry about. Your bitcoin transaction will not be illegal anywhere. This makes bitcoin operations hassle free. Bitcoin uses open source software. It is one of the most transparent systems around. It also offers greater security than the SSL encryption of regular financial transactions. Its cryptographic hash functions have not been broken till date and are deemed impossible to break. In spite of this some bitcoin wallets actually store the data offline in “vaults”.

As an online casino player there are several advantages you can get from bitcoins. The transaction costs are the lowest for bitcoin wallets. Bitcoin online casinos are looking to increase bitcoin transactions. They offer better terms for bitcoin currency such as advantageous minimum and maximum deposit and withdrawal limits and special promotions. Above all you can engage in provably fair gambling as explained above.

What are the disadvantages of playing at online casinos using bitcoins?

population that is not tech savvy there are too many unknowns. The bitcoin system is practically less than five years old and there is a perception that this is not a sufficient period for ironing out glitches. Because there is no central authority that controls bitcoins there is no one to turn to if things go wrong. In a national currency if someone offloads volume, the central bank can step in to hold the price from crashing. There is no such safety net for bitcoins.

The bitcoin is a very volatile currency. There is very little supply and the demand seems to be increasing. So you have a scenario of long term deflation versus the US dollar. A year ago, 1 Bitcoin was worth about $250. But there are violent downward fluctuations from time to time. Therefore it can be a risky currency to play in. Another problem is that bitcoins is not a widely accepted currency as yet. So once you invest in bitcoins there is not much that you can do with it. You definitely cannot use it at offline stores.