One of the hottest trends in the online gambling industry in the past year is Bitcoin (BTC). The virtual currency has grown in value tremendously over the past twelve months and is being used to do everything from buying coffee to funding online gambling websites.
Naturally, the crypto currency has been adopted by many online gambling operators and several bitcoin poker sites are now available for players around the world. The bitcoin explosion continues to grow at a rapid rate, and one must wonder where the currency will be in a year’s time and how it may affect the current online gambling marketplace, let alone the world’s financial system.
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What is Bitcoin?
Bitcoin is an open sourced currency that are mostly bought and sold electronically, but can also be sold in physical coins. BTC transactions mostly take place on the internet, but can be traded in any type of marketplace, either online or offline. Using user-to-user technology bitcoin transactions are facilitated by the network which conducts the transactions of buying, selling and transferring coins.
What Makes Bitcoins Different From Traditional Currencies?
Unlike traditional fiat currencies such as the United States Dollar, bitcoin is not tied to a central bank or government and cannot be manipulated by a government banking authority or have restrictions or regulations imposed on them.
With that said, the supply of bitcoin is actually capped at $21 million according to the current Bitcoin protocol. There is some automation of the buying and selling of bitcoin as to not flood the market. As Bitcoin becomes more and popular and gain value, they can be divided up to 8 decimal spaces – keeping the supply of Bitcoin virtually unlimited.
The bitcoin protocol was allegedly written by a Japanese man named Satoshi Nakamoto. However, this was just an alias and the true identities of the inventor(s) of bitcoin are unknown.
Is Bitcoin Legal?
That depends on your jurisdiction, but in most cases the currency is legal or in a bit of a legal grey area. While express legality is rare in most countries, so is explicit language that outlaws the virtual currency.
For instance, the United States defines legal tender as money issued by the US Treasury. However, the US government does recognize BTCs as a virtual currency as stated by the US Financial Crimes Enforcement Network.
Bitcoin may not be expressly legal, but they are certainly not illegal in the United States. This seems to be consistent with most other nations across the world, but it is always best to check local laws.
The ease of transferring bitcoin is the reason the crypto currency is so popular. Bitcoin are sent and received by using bitcoin addresses. Bitcoin addresses are unique sets of numbers and letters that can are the basis for the bitcoin market.
A fair comparison for bitcoin addresses would be an email address, except that users can transfer coins using the former. Bitcoin addresses are case sensitive and must be entered exactly for the transfer to go through correctly. They range from 27-34 characters and contain both letters and numbers. Here is an example of a BTC address:
If you want to send or receive bitcoins to an online poker account, bitcoin wallet or any other type of bitcoin accepting site – you will need a bitcoin address.
Bitcoin addresses can be generated instantly by most Bitcoin wallets, services and websites. They can also be generated offline via specific software. It is crucial to verify your Bitcoin address before sending and receiving coins because a mistake could have the coins lost forever.
Bitcoin users can have an unlimited number of bitcoin addresses. In fact, many advise using a different Bitcoin address for each individual transaction or transfer over the bitcoin marketplace. This provides extra added security, but one can go even further to protect their coins.
Private keys can be attached to a specific Bitcoin address or wallet. Private keys are a set of numbers that are required for a user to access funds on a particular address, adding another layer of a security to a bitcoin address. Users can attach several private keys to one bitcoin address or set of addresses, beefing up security even further.
The most common way to acquire bitcoin is through a bitcoin wallet. Bitcoin wallets are secure methods for sending, receiving, and storing bitcoins. Each wallet comes with a bitcoin address for utilizing these methods.
Most wallets charge a small fee when exchanging fiat currency for bitcoins, such as converting USD into bitcoins and vice-versa. Transferring and receiving bitcoins to and from your wallet is almost always free.
The most popular bitcoin wallet is Coinbase (www.coinbase.com), which charges a 1 percent fee to buy bitcoins from traditional fiat currencies via your bank account and the same fee to convert bitcoin back to traditional money. There is no fee to send and receive bitcoins to and from your Coinbase wallet.
The 1% fee is among the lowest charged by bitcoin wallets and Coinbase is our top choice for the most secure options for sending, receiving and storing bitcoins. New customers will be limited to 10 BTC on their first transaction, which will take several business days. Once that goes smoothly, customers will be able to buy up to 50 BTC per day and the coins will be credited instantly.
However, wallets and exchanges are not the only way to purchase bitcoins. There are many online services that will send bitcoins to a specified bitcoin address given by the user. These usually come with more fees, but the bitcoins are transferred quickly, usually within a few hours.
Finally, bitcoins can be traded among other bitcoin enthusiasts through bitcoin forums, marketplaces or even in person. These can riskier methods than dealing wallets, but if you can establish trust with others it can be a free way to buy and sell bitcoins.
Bitcoin Advantages vs. Traditional Currencies
Bitcoins have a few unique advantages over traditional government regulated currencies. As we discussed above, they cannot be manipulated or restricted by a central bank, but that is just the tip of the iceberg.
Bitcoins allow users to be anonymous in many cases and operate independently from traditional banking and money transfer systems. Also, unless a user publicly releases their bitcoin wallet addresses no one can trace or track bitcoins back to them.
Costs are also much cheaper and transferring funds is much faster. Traditional bank wires can take several business days, so if you want to send money on Saturday or Sunday – you’re out of luck.
Bitcoins, on the other hand, can be transferred 24 hours a day, 365 days a year and come with little or no fee, regardless of the amount. Also, transfers can be done instantly but normally take several hours. There are normally no fees for transferring coins to different BTC addresses, and if there are fees, they are marginal, usually not more than a few dollars.
Furthermore, once bitcoins are sent they cannot be “charged back” and the order cannot be rescinded by a central authority or law enforcement. Bitcoins can only be accessed through details stored by the user and not through traditional authorization methods which can sometimes be used to fraudulently access fiat currency based banks. This does not mean bitcoins are unhackable, (they certainly can be hacked) but that they cannot be access by traditional means, such as social security numbers, government IDs or by hacking a person’s email or online banking password.
Bitcoin Poker Rooms
A legion of bitcoin online gambling sites have sprouted up in recent years, from online casinos, sportsbooks and poker rooms. All of these bitcoin online gambling entities have had some level of success, but bitcoin poker has undoubtedly taken off over the past year.
What is the reason for this? For one, as we established above, bitcoin is not technically money in most jurisdictions and is nearly impossible to regulate, making it safe from government interference, such as fund seizures. It also provides anonymity and the ability to transfer for funds for little or no cost.
Payment processing costs are a significant expense for online poker rooms, and in recent years much more of those costs have been pawned off onto poker players. Bitcoins eliminate these costs and make depositing and withdrawing free.
Also, depending on the method, withdrawals from traditional US-facing online poker rooms can take weeks or months to reach players and can come with heavy fees. Western Union and MoneyGram withdrawals are the fastest ways for US customers to receive their funds, but fees can be over $200 to receive the maximum amount per transaction which around $2,000. These are normally processed within 48-72 hours. Check withdrawals take several weeks (or months depending on the site) and come varying fees usually from $25 to $50 per check and normally capped at around $3,000 per check.
Bitcoin withdrawals from most bitcoin poker rooms at most take a few hours, and some are totally free. Also, they have high maximum amounts, so any number of bitcoins (thousands of USD or more in value) can be sent quickly and easily. Deposits are also processed instantly.
Because bitcoin poker rooms do not have high costs associated with payment processing, they can offer players better deals and reduced rake. In fact, bitcoin poker rooms offer the lowest rake in all of online poker, beating out PokerStars, Full Tilt and other massive giants in the industry.
Top Bitcoin Poker Rooms
There are quite a few options for bitcoin online poker, and that number is rapidly expanding. Bitcoin poker rooms do not have the large number of players that traditional fiat-currency online poker rooms do, at least not yet. But, there are more than enough players to get a game going during peak hours and plenty of tournament options.
Winning Poker Network
The Winning Poker Network now accepts Bitcoin for deposits and withdrawals. It is the largest U.S.-facing network that accepts Bitcoin. Winning Poker Network skins include Americas Cardroom, Black Chip Poker, and True Poker.
BetOnline started accepting Bitcoin in March 2015. Amounts between $20 and $3,500 are accepted. Deposits and withdrawals are processed using Bitcoin. Bitcoin deposits have a 6$ fee. Withdrawals have a 2% fee.
Intertops now accepts Bitcoin as a deposit option. The limits are $10 to $1,000. Bitcoin was added as a withdrawal option in March 2016. There are no fees related to Intertops Bitcoin deposits or withdrawals.
Bovada started accepting Bitcoin for deposits in April 2016. In May 2016, it was added for withdrawals. There is no fee for Bitcoin deposits or withdrawals at Bovada. Bovada no longer offers poker. It has casino games and a sports book.
Ignition Casino is the new name for Bovada’s poker site. It launched in August 2016. Ignition offers Bitcoin for deposits and withdrawals. There are no fees for any Bitcoin transactions.
Failed Bitcoin Sites
Some Bitcoin-only sites were unable to gain enough market share to remain in business. Others simply never opened. Casualties include SealsWithClubs, Satoshi Poker, WinPoker and Infiniti Poker.
Seals with Clubs
SealsWithClubs went offline on February 11, 2015. The site’s board of directors decided to shutter the room on February 20, 2015. A new room related to SealsWithClubs called SWCPoker replaced it in 2015. It is basically the same site with different software. Bryan Micon, its CEO, was charged with violating Nevada law for operating an unlicensed poker site. These charges were initiated after a raid on Micon’s Las Vegas home.
Micon eventually became chairman of SWCPoker. Micon agreed to plead guilty to the charges related to SealsWithClubs. It is unclear what his involvement in SWCPoker is to this day.
WinPoker was an iPoker skin. It was the first online poker room to accept Bitcoin. It ceased operations in 2015.
Infiniti Poker intended to be a hybrid site that accepted traditional ewallets from Europeans and Bitcoin from U.S. players. Its soft launch in 2013 was a failure. It generated virtually no players. The site went offline in February 2014.
Satoshi Poker never got off the ground. It opened but never generated any interest. The site went up for sale in April 2014 on a Bitcoin forum for 30 BTC. The buyer of the site did not honor player balances, according to the previous owner that admitted the site was nearly bust when he unloaded it.
The Future of Bitcoin
While many critics of bitcoin might say the crypto currency is simply a means to buy underground market items or hide earnings from tax agencies – they are simply ignorant. While there is little doubt that bitcoins are used to do illegal things in some cases, what currency across the world isn’t involved in illicit activities?
The reality is that bitcoins have come a long way in the past few years and are now being accepted as a means of payment for many products and services. WordPress, the world’s largest open source blogging tool now accepts Bitcoin as payment. Hundreds of business, including restaurants, dentists and real estate companies across the United States and Europe now accept bitcoins as payment.
While bitcoin price does fluctuate daily, it is usually just between a few Dollars, Euros, Pounds etc. Crashes do happen, but Bitcoin has steadily increased in value every year since the currency was invented. We are now out of the infancy of bitcoin and the crypto currency unquestionably has some real value, which looks to continue to be rising.
Bitcoin poker has grown rapidly in the past year but is still an extremely new concept. Many gambling markets are unregulated and offer costly deposit and withdrawal options and are also vulnerable to government inference. Bitcoin poker takes care of both of these issues.
The liquidity to make them viable poker rooms for the masses is not quite there yet, but bitcoin based rooms already offer the lowest rake and best rewards in online poker, not just in the bitcoin realm. Tournaments, rewards and game selection all stand to increase as more and more people start playing poker with bitcoins.
In our opinion, the future looks bright for bitcoins and bitcoin poker.