Like a wolf cub abandoned in the forest to fend for itself, Bitcoin was extremely lucky to survive its first years of life. Now that the digital currency is going strong and coming closer to earning the “mainstream” label, it’s about high time we have a little talk about online betting with Bitcoin. Bitcoin is anonymous, impartial to the whims of politicians, and (most importantly) it actually holds some value.
People have been talking about the possibilities of pairing online gambling with Bitcoin for a while now, but only recently has it become a feasible option for the average player. You do not need to be a computer geek to get your own bitcoins, use them to bet online and then cashback out in whatever currency you wish.
Best Bitcoin Betting Sites
To be fair, everything could change overnight. Nobody guarantees the value of Bitcoin and there’s nobody to hold accountable if everything goes belly up. But then again, that’s kind of the point. Fiat currencies are by no means perfect.. but I digress. Where were we? Oh yes, Bitcoin betting sites. I’m happy to report that there are a few betting sites that accept Bitcoin deposits. In fact, there is at least one way to transfer Bitcoin funds to almost any online casino or poker site.
There are a few Bitcoin-first casinos and poker sites out there, but none of us here at OnlineBettingSites have had a chance to look too deep into those. We would rather stick with big-name betting sites that have verifiable reputations. So far, the only Bitcoin-specific sites have been located in third-world countries and are basically unlicensed.
Update: In April 2015, OPAY (parent company of Neteller) announced that it has added Bitcoins to its list of accepted funding methods. Neteller customers can now upload funds to their Neteller accounts where the funds will be exchanged for any other currency accepted by Neteller. After the transaction is complete, you can immediately use those funds to make a deposit to any betting site that accepts Neteller.
What this means for you: Any online casino, poker site or sportsbook that accepts Neteller effectively accepts Bitcoin deposits. All Bitcoin deposits are exchanged for a fiat currency, so you cannot actually play in Bitcoins. Furthermore, all exchange fees are waived if your Neteller account is in Australian dollars, US dollars, Euros or British Pounds.
In a Reddit thread discussing the news, a user posted the following screenshots confirming the addition of Bitcoin as a funding method for Neteller account holders:
What is Bitcoin?
Bitcoin is an electronic currency that exists only online; it takes no physical form in the real world. The scarcity is preserved (i.e. people can’t make copies of Bitcoins) through the use of a sort of public ledger. Bitcoins can be exchanged for real cash, and the value fluctuates based on demand and perceived risk.
Unlike most traditional currencies, Bitcoins are not controlled by a central bank or single policymaker. The supply of Bitcoins is limited, but BTCs can be divided up to 8 decimal places as the value of the currency increases. This allows a nearly unlimited amount of Bitcoins to be purchased as the currency becomes more valuable and popular. Under the current protocol, 21 million Bitcoins will be released in total. After that, no Bitcoins will ever be issued again (supposedly).
Is Bitcoin Legal?
The legal situation is a bit of a grey area. Producing your own centrally controlled currency is illegal, or at least not recognized in many countries. Under those terms, Bitcoin technically is not a currency, but governments around the world are starting to take notice. The fact that it is difficult to control makes certain government types feel threatened. Only the future will tell how Bitcoins are eventually treated under the law.
For now, the Bitcoin market acts without interference from the government and many Bitcoin wallets and exchanges operate around the world. We know that the US government has issued an arrest warrant for the operator of one Bitcoin betting site, but so far nobody has gotten in trouble for simply using the currency to bet online.
Why are Bitcoins Controversial?
There are several reasons for this. Firstly, they are a newly minted currency that is growing in popularity that has no central bank and can be used anonymously. This fact alone may scare people as most people have never used a currency that is not backed by a central bank or a government.
Secondly, Bitcoin is popular among underground marketplaces that sell a variety of items, including drugs and other illegal items anonymously. Some proponents of Bitcoin would say that the currency is mostly used by drug dealers and those looking to launder money – this could not be further from the truth.
Lastly, Bitcoins have experience wild fluctuations in value over the years. Many times they have dropped 20-40% of their value overnight, and because they are still scarce, large movements of BTCs can have a large effect on the market price. As Bitcoins are accepted by more merchants and become more widely circulated, their value will stabilize.
Compared to fiat currencies, Bitcoin has performed better and increased more in value. The US Dollar and many other fiat currencies slowly, but predictably lose value year after year. While Bitcoin is volatile, it has steadily increased in value since its inception in 2009.
What are Advantages to Bitcoin?
Bitcoins can be transferred anywhere in the world and are essentially borderless. This can be done anonymously – for free or little cost – and without interference or regulation from the government. These transactions are also irreversible and cannot be seized by any government entity. Low costs of deposits and payouts are one reason it’s so attractive to online gamblers. The ability to send or receive thousands of dollars worth of Bitcoins anywhere in the world without fees is especially attractive.
It’s always on. As long as the internet is up and running, Bitcoins can be bought, sold and transferred. There are no bank holidays or days off. If you are ready to make a trade the Bitcoin network is always available.
Sending and Receiving BTC
Users of Bitcoin can send and receive BTCs by using Bitcoin addresses. Sending and receiving Bitcoins can be as quick as 10 minutes, but transactions average around a few hours to be processed. Some transactions have a lower priority than others and can take up to several days to process. However, the vast majority of transactions are processed quickly. As we mentioned above, once a transaction is processed to a Bitcoin address it is irreversible.
Bitcoin addresses are unique and contain a series of letters and numbers that range between 27-34 characters. Bitcoin addresses are the lifeblood of Bitcoins. Similar to email addresses, users can send Bitcoins to a user by sending them to one of their addresses. Addresses are case-sensitive and must be exact for payment to be received.
Most Bitcoin wallets and exchanges have a button that will randomly generate a Bitcoin address instantly. These can both be created online via Bitcoin-accepting wallets, businesses, and exchanges along with offline software.
For ultimate security, Bitcoin users should use a unique address for every transaction on the network. An additional security measure is a private key, which is a set of numbers that is required for access to funds to that address.
Since Bitcoin addresses change frequently when operating wallets and exchanges it is crucial to verify the address and any keys before sending or receiving a Bitcoin transaction.
There are a number of options for players looking to buy and sell Bitcoins. The most common way to acquire coins is through a Bitcoin Exchange.
Bitcoin exchanges allow players to buy and sell Bitcoins through a variety of methods. Most exchanges use bank transfer, ACH, or bank wires as a payment method. Exchanges have a set number of coins they can sell per day and often times those limits will be exceeded. Users may have to wait until the next day to purchase coins.
Exchanges are the cheapest way to acquire Bitcoins online through many different currencies but are not the fastest. After a transfer from a player’s bank account, purchased coins will normally be available the next business day in the player’s wallet. Exchanges are the cheapest way to acquire Bitcoins. Fees can be virtually nothing if a user is a high-volume buyer or seller and are almost never higher than 1% of the total cost of Bitcoins.
There are also many services that will send Bitcoins to an address or designated Bitcoin wallet in exchange for cash. Many of these services also allow users to remain anonymous. These services are the fastest way to receive Bitcoins, but carry higher fees than exchanges. Users can deposit cash through Western Union and Money Gram services and through a variety of other methods, including localized payment processing options. Finally, Bitcoins can be acquired in person by using a Bitcoin directory and via forums or other marketplaces. These are less secure methods but may come at a cheaper cost than some services.
If players have the time to wait a business day or two to receive their coins, Bitcoin exchanges are the best option. They are secure places to store coins and the fees are much smaller than other methods.
Bitcoin Online Gambling
As online gambling and Bitcoins both continue to grow in popularity, many gambling-related sites based on Bitcoin have begun to appear online. Bitcoin online gambling is in its infancy, but players already wager millions each year in Bitcoins on a variety of sites.
The free movement of money and nature of Bitcoin is perfect for online gambling as accepting deposits and withdrawals now becomes basically free for sites and players. Also, gambling via Bitcoin is not the same as using a fiat currency such as the US Dollar.
The legality of operating a US-facing gambling site that accepts US dollars can be bad news for operators, but what if they are only accepting Bitcoin? Many operators are arguing that accepting Bitcoins for deposits from anywhere in the world is legal. This may lead to a legal showdown at some point, but for now, gamblers from all over the world are starting to gamble online via Bitcoin.
Bitcoin Gambling Sites
As mentioned above, transferring money via Bitcoin is either extremely cheap or free. Payment processing is a considerable expense for all gaming sites such as online sportsbooks, casinos, and poker rooms. Since Bitcoin gambling sites payment processing is vastly cheaper than most other online gambling sites, the odds offered are normally much better than regular operators.
BTC betting sites have also become a thing. Currently, there are a few online sportsbooks that accept BTC payments operating with the industry growing heavily in recent years. Bitcoin sportsbooks may not have the massive online betting markets larger sportsbooks have, but they have a more than adequate number of available wagers for most worldwide sports. Betting markets are available for all major American sports and have a large selection of European domestic soccer leagues, along with international matches.
There is even a Bitcoin sports betting exchange, which is a peer-to-peer betting market that players can match or offer different bets. The odds on the bets offered on the exchange are among the best prices online. Liquidity is a small problem, but as the site gains a larger base of sports bettors this will not be a problem.
Poker is the most intriguing of the Bitcoin online gambling options. There are several Bitcoin poker sites offering real money games, such as Texas Hold’em and Omaha. These rooms offer bonuses, among the lowest rake for online poker cash games and lucrative VIP programs.
Mike Murphy is the founder of OnlineBettingSites.com and has over 10 years of experience in the legal online betting industry. A regular attendee of industry trade shows and conferences, Mike is a strong proponent of regulated markets and responsible gambling policies.