In a world where money is starting to go digital, physical cash is disappearing more and more. Mostly, money are transferred over the internet or via credit cars – and mostly those transactions comes with a fee. Those fees cost unnecessary money that you could have used for something else, but instead jut goes down the drain. This is something that affect online casino players quite a lot – as good as all casinos have different fees for deposits and withdrawals. There hasn’t been any way to get around this before, but now there is – and the answer is called Bitcoin.
What is Bitcoin?
Bitcoin is the first example of a growing category of money called ´cryptocurrency´, and is a form of digital currency. The coins are both created and held electronically – so there aren’t any physical Bitcoins at all, they are all digital. The Bitcoin is like conventional currencies, like dollars or euros, in the sense that it can be used to buy things electronically. However, the most important characteristic that makes it different from other currencies is that the Bitcoin is entirely decentralized. There is no single institution that controls the network, like a bank would with the traditional kinds of currencies that we are used to. In theory, this means that one central authority can’t cause a meltdown – or simply decide to take people’s money away – which was the case in Cyprus 2013 when the Central European Bank decided to do just that. Unlike government issued money, the Bitcoin can’t be inflated. The
Conventional currency has always been based on gold or silver, and theoretically you know that if you hand a dollar over to the bank you would get some gold back. Bitcoins, on the other hand, is based entirely on mathematics. The Bitcoins are produced from software following a mathematical formula, and this is made in different places all over the world. Both the software and the mathematical formula are open sources, so that anyone can have a look at it to make sure it does what it is supposed to. This means that as a Bitcoin user, you have full insight into the entire process. The mathematical formula also limits the supply of Bitcoins to 21 million, which can never be changed. This makes it impossible for the Bitcoin to be inflated, as government issued currency can be.
Pros and cons
In short terms, Bitcoin does have quite a lot of both similarities and differences from traditional currency. It fills the same function, you’re able to buy things with Bitcoins just as you can do with “regular” money – it’s the production and storage of them that differs from what we are used to.
The fact that the entire system behind Bitcoin is transparent is one of the big pros. Every single transaction that has ever been made in the network is stored in a huge general ledger, called the blockchain. This means that anyone can tell how many Bitcoins are stored at a specific address, at least for all publicly used Bitcoin addresses. The Bitcoin addresses are anonymous though, and are not tied to names or anything like that. In other words – if you want to you can see in which addresses all Bitcoins in the world are stored in, but you can’t see who the addresses belong to. Bitcoins can’t be hidden or stored away anywhere, and it is the users that control all of it – not a single institution.
When it comes to transactions, Bitcoin has a lot going for it as well. You can send money anywhere, and it will arrive just minutes later. It just has to be processed by the Bitcoin network first. It is also a lot cheaper to transfer money with Bitcoin than it is with most banks, who can charge up to €10 for a international transfer.
The downside with Bitcoin though, at least for the moment, is that it is rather limited. There are quite a few companies and stores that does accept Bitcoin as currency, but it’s far from all of them that does. This causes a big limitation to the currency, but that will of course change as they gain popularity. One of the markets that has embraced the Bitcoins as currency is the online casino business, where you can use Bitcoin for faster deposits and withdrawals.
Bitcoin in the casino business
For the online casino business, digital currency like Bitcoins is a real game changer. One of the major downsides about playing at online casinos is the time and the fees it takes to make deposits and withdrawals. Sometimes you’ll have to wait up to three days before you can play at the casino for your money, and a lot of times the fees are rather high. Bitcoin eliminates that issue, since the transactions are both fast and free.
Another major difference that can be made when casinos are using Bitcoin instead of traditional currency is that the casinos can offer higher returns to the players, as well as bigger bonuses. When a casino is using Bitcoin, both the casino and the users get rid of the transaction fees, which means that the casino has more money they can give out to the players in wins and bonuses. Some casinos that are using exclusively Bitcoin instead of traditional currency has a RTP (Return to player) of as much as 99%. With most casinos having a RTP around 95%, this does actually make quite a difference for the players.
Despite the fact that Bitcoin is a digital solution to a multitude of economic problems of the contemporary world, Bitcoin does have some issues which stand in the way of being widely accepted. The main reason for this is that Bitcoin as currency is very volatile. The price at any moment could be a lot higher, or a lot lower, than it was the moment before.
In order for the Bitcoin to function as a currency at all, it has to have some value behind it. While the value of gold is determined by its use in industry, Bitcoin isn’t really anything more than bits on one’s computer – but it still has a value. The value of Bitcoin is determined by (supply and) demand, as well as media events. The supply part is put in brackets, since the maximum supply is limited to 21 million, as mentioned earlier. Therefore, the demand is the core of the Bitcoin value – the more people who wants Bitcoins, the more expensive they get. The media coverage also has a lot of influence on the Bitcoin value. The cryptocurrency community isn’t that numerous yet, so Bitcoin-related media helps to raise awareness about the benefits of digital currency. The demand gets stronger the more people are willing to try the new technology, and it shows the the approval of cryptocurrency from the big market players and the big media names.
To put it in simple words, the value of Bitcoin really is what the people who use it believe it to be worth. Up until 2011, the worth of a Bitcoin never exceeded 1 US dollar. Today however, the demand has increased, and the worth of a bitcoin has gone all the way up to 1000 US dollars.
In short, the Bitcoin is a relatively new phenomenon on the market. It has some great advantages compared to the traditional currency that we are used to, with its value decided entirely by demand and the people using it. With it growing more popular on the market and being useable in more and more places – the Bitcoin might just be the cryptocurrency of the future.