Introduction to Bitcoin Casinos
WHAT IS A BITCOIN CASINO?
Online casinos have always used regular currency like the South African Rand, Euro, US Dollar, or GBP to enable players to make payments and also withdraw their winnings from their casino accounts. In recent times, quite a few online casinos – many of them run by well-known operators have started accepting a new form of digital currency – the Bitcoin.
On this page we will discuss the different aspects of Bitcoin including::
- What it is
- How it works
- What are Bitcoin casinos
- Bonuses available at Bitcoin casinos
- Making payments and withdrawals
- Basic Bitcoin FAQs
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WHAT IS BITCOIN?
- It is digital and created electronically using mathematics and a computer.
- It cannot be printed on hard paper, unlike traditional currency.
- It is completely secure.
Bitcoin is a cryptocurrency – a form of digital currency – that players can use to transact at online casinos. It was first mentioned in a Cryptography mailing list by Satoshi Nakamoto – an anonymous entity that could be a person or group of people – in 2008. It was created to function as a medium of exchange which does not rely on central authorities. That practically means that there is no middle man or, to be precise, no bank which transfers money between a buyer and a seller. To acquire Bitcoin you need to "mine", which means that you should use your computer's processor to solve complex algorithms. These algorithms are called "blocks".
It all started back in 2008 when a paper titled "Bitcoin: A Peer-to-Peer Electronic Cash System" was posted on the Internet. The paper was signed by Satoshi Nakamoto and provided steps for using a peer-to-peer network which was created to enable "a system for electronic transactions without relying on trust". The first Bitcoins were issued only a few months later and in January 2009 the Bitcoin network came into existence. Satoshi Nakamoto mined the first block of Bitcoins ever obtaining a reward of 50 Bitcoins. The first Bitcoin block is also known as the "genesis block".
The only security flaw occurred in August 2010 when transactions were not properly verified thus enabling users create an indefinite number of Bitcoins. After the bug was fixed and the Bitcoin protocol was updated, there were no more issues with "mining" Bitcoins. Today you can use them to pay goods and services on the Internet without revealing your identity. Payments are processed easily with no additional costs as there is no intermediary between two entities.
Bitcoin can be split into smaller units:
- MilliBitcoin or mBTC which is one-thousandth of a Bitcoin (0.001 BTC)
- MicroBitcoin or µBTC which is one-millionth of a Bitcoin (0.000001 BTC)
Satoshi or one-hundred-millionth of a Bitcoin (0. 00000001 BTC), which is the smallest Bitcoin sub-unit
- It ensures instant transactions, be it making payments or receiving funds.
- It is completely decentralised and therefore not controlled by any government agency or financial body.
It is coded in a way that ensures:
- There is no inflation and that it is self-sustaining.
- There is no flooding of the virtual space with Bitcoins; the maximum cap by 2140 is 21 million Bitcoins.
- It is available for purchase at Bitcoin exchanges.
You need a Bitcoin wallet to be able to transact with it.
- It offers players complete anonymity while conducting transactions.
There are no transaction fees chargeable when transacting with Bitcoin.
HOW BITCOIN WORKS
To use Bitcoin at an online casino you have to first buy it.
- You can buy them at a Bitcoin exchange, a Peer-to-Peer (P2P) environment.
- Register with the Bitcoin exchange.
- Click the Sign-up button.
Bitcoin is traded just like any other physical currency. The value of Bitcoin is determined by the work done by your computer and it depends on its processing power needed to solve math puzzles. There are exchanges which serve as intermediaries converting Bitcoins to other national currencies and vice versa. You can easily find specialised websites on the Internet which update the information on the value of Bitcoin and publish the graphs displaying the fluctuation of Bitcoin prices. At the moment of writing this guide the value of Bitcoin was R13,662.80.
In South Africa there are several Bitcoin automated teller machines (ATM) where you can buy Bitcoins or convert them into South African Rands. One of the recommended options to purchase Bitcoin in South Africa is by using your credit card on CoinMama or via trading platforms such as OptionTime, Plus500 and Markets.com. There are also local Bitcoin exchanges such as BitX and community exchanges such as Local Bitcoins.
Bitcoin transactions are processed via electronic Bitcoin wallets. Transactions are digitally signed for security and each transaction can be traced to the point where the Bitcoins were generated. It may strike you as surprising that there are actually no Bitcoins and that there are only records of Bitcoin transactions. All you can see are increasing and decreasing balances.
When it comes to transactions, they have three pieces of information: an input, an amount and an output. The input is a record of an address used to send the Bitcoins to a person which sends a certain amount to somebody. The amount is the amount of Bitcoins the person is sending while the output is the address of a person which should receive the payment. To complete a transaction, you need a randomly generated Bitcoin address and a private key which consists of number ad letters and is kept secret.
On the resultant screen, provide your basic details like:
- E-mail ID
- Choose an appropriate password.
- Click the Terms and Conditions checkbox.
- Click the Register button to complete the basic registration process. The exchange sends confirmation data to the e-mail id you have provided.
- Provide the confirmation data on the Bitcoin exchange to complete the registration
Once you are registered with the Bitcoin exchange you can get Bitcoins using one of the following ways:
- You can buy them from Bitcoin sellers listed on the exchange. The exchange provides enough information about the seller for you to confirm his credibility before purchasing Bitcoins from him.
You can buy them for the given exchange value using:
- Credit card
- Debit card
You can get them as exchanged items from a seller or other peer:
- You need to exchange them for goods and services you provide.
You can mine them yourself.
- Use your computer to hunt for 64-digit numbers.
- You can get these numbers by solving complex mathematical problems.
- You compete with other miners to get the correct 64-digit number as you repeatedly solve these math puzzles.
- Once you generate the correct number you get 25 Bitcoins as a reward.
You need a Bitcoin wallet to store your Bitcoins
- The wallet itself does not store the Bitcoins.
- It stores a pair of keys – the public and private keys – that allow you to access your Bitcoins.
- The Bitcoins are stored on the blockchain, a virtual ledger of sorts that has details of all Bitcoin transactions.
You can store your Bitcoins in one or more of the different kinds of wallets simultaneously:
- Hardware wallets
- Web wallets
- Desktop wallets
- Mobile wallets
- Paper wallets
- Brain wallets
You can access the Bitcoins from any of your Bitcoin wallets to make payments at your favourite online or mobile Bitcoin casino. There are wallets for Bitcoin online casinos and also separate wallets specifically for Bitcoin mobile casinos.
Popular wallets for Bitcoin online casinos include, among others:
- Bitcoin Core
Popular Bitcoin wallets for mobile casinos include:
- Bitcoin Wallet (for Android)
- Green Address
Bitcoins are relatively new and at present not available at South African casinos. It is therefore natural for you to have loads of questions about this new form of currency. We have put together for you a set of FAQs that answer the basic questions relating to Bitcoins, especially from a South African viewpoint.
What is Bitcoin?
Bitcoin is a unique virtual currency which can be obtained by purchasing or earning, also known as "mining". You can use it nowadays to fund your online casino experience. Casinos also allow players to withdraw their winnings in Bitcoins.
How to play using Bitcoin?
There is no difference in playing casino games when you use Bitcoins. The only difference is in the way your transactions are processed.
- You need to buy Bitcoins at a Bitcoin exchange and store them in a Bitcoin wallet.
- Follow the process listed above in the section titled Payments and Withdrawals at Bitcoin Casinos to transfer them to your casino account.
- Once they are in your account you can use them to play your favourite casino games.
What is the price of Bitcoin in South Africa?
The price of Bitcoin fluctuates and it is subject to constant changes within 24 hours. When you want to buy Bitcoin on an exchange, you should check the fees. They may vary from 0,8% to 1%. Withdrawing Bitcoin and converting it to ZAR also includes a trading fee.
- The accepted standard for pricing, in terms of the exchange value, in South Africa, is the standard international exchange price against the US Dollar.
- You can then convert that price value into South African Rands to arrive at the price in terms of the local currency.
- However there is no fixed rate as the Bitcoin exchange value is constantly fluctuating.
How to get a Bitcoin ewallet?
You can choose from four wallet types: desktop, mobile, online and hardware. Whichever of them that you choose make sure to take all the appropriate steps to keep you wallet secure.
Getting a Bitcoin e-wallet is simple.
- You do not have to download it to your computer or mobile device.
- You can buy a Bitcoin e-wallet.
- There are a large number of them available for free as well.
- Sign up with the e-wallet by providing the required information.
- Set a password to access the private key; it is as simple as that.
Is Bitcoin legal in South Africa?
Bitcoin in general and Bitcoin gambling has not been regulated yet. When it comes to gambling, Bitcoin is considered as a payment method. There is much controversy surrounding the Bitcoin over the years globally, and this is true about South Africa as well.
- The South African casino industry has still not accepted it as legitimate currency.
- However, this does not take away from the legitimacy of the Bitcoin.
- It has already been accepted as legitimate currency in the US and also China.
- Our feeling is it is only a matter of time before South Africa follows suit.