So you want to know how to gamble with Bitcoin?
You’ve come to the right place, I think. This post is ALL about how to gamble with Bitcoin.
I know some people like to assume their audience knows something about a subject already, especially when you’re dealing with search engine visitors who presumably typed in a specific phrase to find a page.
I prefer to assume you know nothing at all about the subject and then cover it comprehensively.
That’s what I plan to do with this post.
What Bitcoin Is and How Bitcoin Works
Bitcoin is a digital currency. This is as opposed to a traditional currency like the U.S. dollar, the Euro, or the Japanese yen.
Other words to describe Bitcoin include “virtual currency” and “cryptocurrency.” (I like that 2nd expression, by the way, because the prefix “crypto” refers to hiding or encrypting information.)
But what does that mean?
Something that’s digital–a book, music, currency–is something that’s coded onto a computer somewhere. It’s not something that necessarily has physical properties. Some digital books are available in hardback and softcover, but the digital book isn’t available in either–it only exists virtually. Same thing with digital music. You stream it over a computer.
So Bitcoin, being a digital currency, is a type of money which has no physical properties. A Bitcoin isn’t available as an actual physical coin or bank note. It’s only available on the web.
The other cool thing about Bitcoin (and other digital currencies) is that they’re government-independent. This sounds weird to modern ears, but older people might remember the use of “scrip” on farms. My dad likes to tell stories about a huge farm out near where he grew up where most of the employees never left the property. The scrip was money that was privately-issued by the owners of the farm. They could buy anything they needed there with it.
What’s the practical application of being government-independent?
It allows for the possibility of anonymous transactions.
Anonymity is great if you’re dealing with gambling, because gambling is–in many jurisdictions–a legal gray area.
Creators of digital currency like Bitcoin make the bitcoins electronically and record them onto a virtual public ledger. This is called “mining.”
As with traditional currency, you need someplace to store your bitcoins. In real life, most of us carry our cash in a money clip or wallet. Bitcoin users have virtual Bitcoin wallets. In fact, without a Bitcoin wallet, you have no way of storing bitcoins.
There are also marketplaces where you can buy and sell bitcoins and other digital currencies. These are called “exchanges.” They’re not much different from any other financial marketplace, either–a digital currency exchange is similar to the stock market.
Your First Tentative Steps toward Gambling with Bitcoin
The first step toward using Bitcoin to gamble with is setting up a Bitcoin wallet. Without that, you have no place to put your bitcoins, so that’s the natural first thing to do.
Once you have a wallet, you can put some bitcoins in it. To do that, you need to get some bitcoins.
And the easiest way to do that is to buy some bitcoins using another currency.
That’s not the only way, though. You could have someone transfer you some bitcoins. I know some webmasters in the gambling industry who sell advertising and get paid via bitcoins.
You could mine your own bitcoins, too, but that’s probably almost entirely beyond the scope of this post. After all, you came here wanting to know how to gamble with Bitcoin–not how to start mining bitcoins.
Once you have bitcoins, you need to find a gambling site which allows you to deposit (and hopefully withdraw) using the currency.
So you’re looking for 3 kinds of sites, in this order:
- Bitcoin wallets
- Bitcoin exchanges
- Bitcoin casinos
Bitcoin Gambling Casinos
Websites which accept Bitcoin for wagers are called “Bitcoin casinos.” They’ve become increasingly popular over the last couple of years–especially with players from the United States.
One of the biggest challenges facing U.S. gamblers who like to play online is the questionable legality of online gambling transactions. It’s not illegal in most states to place a bet on a hand of blackjack or a spin of the slot machine reels.
But it is illegal for the company on the other end of that transaction to accept that wager.
And in 2006, the government pass legislation called UIGEA (The Unlawful Internet Gambling Enforcement Act. This made it illegal to facilitate money transfers for the purposes of illegal gambling.
As a result, it became hard for U.S. gamblers to transfer money to online casinos for the purposes of internet gambling. Most credit card companies reject such transactions immediately.
Remember how I mentioned that one of the big advantages to using a cryptocurrency is the anonymity?
This is why Bitcoin gambling is on the rise.
Bitcoin Gambling Sites
Bitcoin gambling sites can be categorized roughly into 2 groups:
- Sites which work exclusively with Bitcoin. At these sites, the only deposit and/or withdrawal method is Bitcoin. All the games show your credits in Bitcoin format.
- Other sites which offer Bitcoin as one of multiple deposit and withdrawal options. These types of sites are becoming increasingly popular. They don’t usually show the credits in terms of Bitcoin, though–they usually just use U.S. dollars–or whatever your local currency is.
Many of these Bitcoin-exclusive gambling sites use something called “provable fairness.” This is a technology that double-checks the gambling games’ outcomes for mathematical fairness. (Although I’d argue that casino games, by their very nature, are inherently unfair mathematically.)
I prefer to gambling at more established gambling websites that accept Bitcoin as an option, rather than gamble at a site where Bitcoin is the only option. I’m just not as familiar with the new brand names in the Bitcoin casino space. I might give some of these sites a try, though, as they seem to have unique games that are unavailable at more traditional online casinos.
Disadvantages of Using Bitcoin to Gamble With
I’d be remiss in my duties as a blogger if I didn’t mention some of the disadvantages associated with using Bitcoin to gamble with.
The most important of these is the volatility of the price of Bitcoin.
When you gamble in Euros or U.S. dollars, you have a reasonable idea that the currency’s value won’t go up or down much between the time you deposit and the time you cash out. Those are stable markets.
Because of its nature, Bitcoin prices are extremely volatile. In fact, as I write this, Bitcoin has been as high as $7700 per bitcoin during the last 30 days, but the price today is only $6250.
If you deposited a single bitcoin in a casino and broke even–still having a single bitcoin at cashout time–you would have lost $1450 in value just because the price of Bitcoin has dropped.
This is also a feature, though. The price of Bitcoin doesn’t go steadily down, after all. It goes up, too. When it does, you can take advantage of that to make a profit even if your gambling didn’t go well.
The trick is timing the market prices. I don’t have any advice on that, and I suspect that anyone who does might be less than trustworthy.
The other disadvantage is that it’s something new, and that might make you uncomfortable. I’m a firm believer that doing new things and being uncomfortable lead to growth, though. So both of these so-called disadvantages are also advantages–from the right point of view.
Where to Go Next
Here are some Bitcoin wallets to consider:
- Bitcoin Wallet
- breadwallet
- Edge
- Electrum
- GreenAddress
- GreenBits
- KeepKey
- Ledger Nano S
- Mycelium
- Samourai Wallet
- TREZOR
Here are some Bitcoin exchanges to consider, too:
- Bitcoin Source
- Bitfinex
- Bitstamp
- BTCChina
- BTC-e
- Coinbase
- Cryptsy
- Kraken
Finally, here are some Bitcoin casinos to consider:
- Bovada
- Cafe Casino
- Ignition Casino
- Slots.lv
Conclusion
So how do you gamble with Bitcoin?
It’s as easy as opening an account with a Bitcoin wallet, buying some bitcoins, and opening an account with a casino that accepts Bitcoin as a payment option.
The perks of anonymity and easy processing are hard to overstate, but it’s also a drag that the price of Bitcoin rises and falls so sharply and seemingly randomly.