Explained: Bitcoin and its Benefits for Mobile Casino Players
In this article, I’ll be introducing you to the ever-growing world of Bitcoin. I’m sure you will have heard of it by this point, as incredulous news readers try to describe how something magicked out of the ether of the internet is turning into large amounts of real money. I will be guiding you through the somewhat complicated process of what is making bitcoin a legitimate currency, before discussing the benefits and opportunities it can offer you as a mobile gambler. So, let’s begin at the beginning...
What is Bitcoin?
Bitcoin is a decentralised peer-to-peer digital cryptocurrency. For those of you have that little idea what I just said, read on. However, for you techies out there, the anonymously-published paper that proposed the system in November 2008 is publicly available.
However novel and potentially confusing it may be to someone unacquainted with the currency, Bitcoin is real money. You don’t have a coin or note in your hand, but these days how much of our money do we spend in that way anyway? Like the numbers in our bank accounts, it can be exchanged for goods and services, and indeed for real world currency.
One of the many benefits of this currency is that, being just an entry in a database, you can cut it up as small as you like. Currently the lowest operable limit is set at 8 decimal places, that’s 0.00000001 Bitcoins. Right now, that’s approximately 1/250th of a penny, so most places operate in the more sensible millibitcoins, or ‘MilliBits’,which equate to 0.001 Bitcoins, or approximately 34p.
Where Does its Value Come From?
Similar to gold or gems, Bitcoin is a resource whose scarcity defines its value, except that there is no real-world utility to Bitcoins except for its uniquely secure scarcity. Whereas gold can have a practical purpose such as in fillings or computer circuits, Bitcoin’s utility is that it offers an exceptionally secure currency. Because there is a finite limit to the number of Bitcoins that will ever be in the economy, at 21 million, its value can’t be deflated by the whim of a government deciding to print more money. However, not all 21 million Bitcoins are yet in the economy, as to reach circulation they have to be ‘mined.’
While this isn’t really relevant to the day-to-day Bitcoin user, I feel like it’s important to cover it to understand where these Bitcoins are coming from. The ‘crypto’ part of Bitcoins’ cryptocurrency description comes from the fact that bitcoins are encrypted by hashing – a mathematical algorithm that makes a unique number. To mine them you need to run the hashing algorithm, and the mining process is essentially a race to hash these blocks – each block hashed equates to 25 bitcoins. That’s over £9000, so why isn’t everyone doing this?
The Cost of Bitcoin Mining
Bitcoin mining takes a massive amount of computing power, meaning that if you were to have a top-tier computer next to you hashing through the numbers, then it would take approximately 100 years to hash a block, not to mention that the algorithms are constantly being made harder to compensate for the demand, and that the reward for hashing a block decreases every four years. Based on Moore’s Law (the approximation that computing power doubles every two years), the 8 million remaining Bitcoins are expected to have been mined by 2140, so there’s a fair way to go. The inherent technology and electricity costs associated with this mining is partly what drives the value of the currency, so the continued mining of bitcoins remains an integral part of their existence. So with independent mining utterly impractical, pooled mining in now the way to go, and even then it involves a lot of investment and you really have to know your stuff to do anything more than break even. However, real money can be and is being made by Bitcoin mining.
While Bitcoins’ scarcity is integral to their value, it is the security of this scarcity, and thus the security of the entire system that is ultimately where the value of Bitcoin lies. So what makes Bitcoin so secure? As I mentioned in my introduction, Bitcoin is a decentralised peer-to-peer currency. That means that there is no central government, authority, or even server that handles the wallets and transactions of Bitcoin users. Everything is handled by a peer-to-peer network consisting of every computer that has downloaded the Bitcoin client. So if anyone can download this client and have access to the network, then how is it secure? Bitcoin’s own magnitude is what makes sure that it is secure. If you change something from your computer, the network will recognise that this change doesn’t agree with anyone else’s data, and the change will be reverted. Essentially unless the majority of the computing power in the network all makes exactly the same change at the same time, then the system is safe. With almost 2 million client-users from all over the world, that makes Bitcoin pretty darn secure.
Another layer to the security is the bitcoins themselves. The SHA-256 algorithm used to hash Bitcoins was developed by the NSA in 2001, and is the same algorithm that makes our credit card transactions secure online. So not only are they using the same level of security for bitcoins as they are in the banks that store our real-world currency, but the currency itself is more stable than the currency we use every day.
Let’s be honest – this is why you’re here. If you’ve survived this far then well done, and if you’ve skipped to this part then honestly, fair enough. So, why use Bitcoins for gambling?On top of everything I’ve already said about bitcoins’ unique security, they are also phenomenally convenient to gamble with. With Bitcoin, as there are no third parties to pay, there will never be fees on deposits or withdrawals, there is zero waiting time on cashouts, and you don’t need to hand over any personal details in order to play. Ukash and Phone (SMS) Billing Deposits are other popular and convenient banking options at mobile casinos. With the emerging popularity of this cryptocurrency, gambling websites have been weighing up the odds and trying to decide whether they should jump on the bandwagon. In February 2014, Vera&John became the first mobile casino to accept bitcoin, and since then many more have followed suit, including Bitstars.net, who in April became the first bitcoin-only mobile casino as we reported in this article. I’ve compiled a short list of mobile casinos that accept Bitcoin, so you can get started immediately!
Finally, if you’ve been convinced by my Bitcoin spiel, it’s time to sign up. Here’s how:1. Make a Wallet
Your wallet is what allows you to make Bitcoin transactions. There are various versions of the wallet available to download for desktop, browser or mobile use, and conveniently their dedicated mobile wallets are for Android!2. Get Bitcoins
You now need to head over to a Bitcoin Exchange to purchase yourself some Bitcoins – or more likely, MilliBits. From there, all you need to do is purchase your Bitcoin and advance to the stage you’ve been waiting for.
3. Spend Bitcoins
It’s really that simple, once you’ve got your account and your bitcoins, all you need to do is visit one of the casinos above and start playing! And once you have some winnings to spend, why not head over to the Bitcoin store to spend your hard-earned cryptocurrency.
With the increasing demand for Bitcoin, and the ever-growing number of companies integrating Bitcoin into their payment options, we hope to be producing more Bitcoin articles in the future!