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A Complete Guide to Using Bitcoin to Play Online Poker
Over the last few years Bitcoin has started to pop up everywhere in the tech world and it’s starting to make some serious noise in online poker with several Bitcoin-only sites and a few other mainstream sites that accept Bitcoin in addition to regular cash.
Why is Bitcoin such a tantalizing option for online poker?
To understand the answer to that question you have to realize that for the entire history of online poker its Achilles heel has been the depositing and withdrawing of real money.
Real money is generally considered imperative for playing poker but it’s also what keeps poker from being regulated like video games, which are accessible to almost everyone.
Meanwhile Bitcoin, in theory anyways, is the single greatest way to transfer cash to and from an online poker site. It’s digital currency basically.
There are no banks involved and it’s possible to transfer bitcoins in seconds instead of the weeks it sometimes takes to process cheques or wire transfers. On top of all that there are virtually no transfer fees.
Bitcoin has the chance to fundamentally change the way online poker sites are run. In the following article we’re going to take a closer look at the digital cryptocurrency and the poker sites that accept it.
A Brief Lesson in Bitcoin History
The history of Bitcoin is unusual because its development is shrouded in mystery.
Here’s what’s known:
Bitcoin was invented by a person or persons using the name or pseudonym of “Satoshi Nakamoto” in 2008.
The digital currency was announced in a research paper released by Nakamoto titled “Bitcoin: A Peer-to-Peer Cash System”.
Nakamoto had an unusual idea for ground-breaking online payment system that wouldn’t require banks or fiat currency.
Instead the coins themselves are created by powerful computers verifying and recording payments on a public ledger.
Bitcoins don’t represent anything and they aren’t backed by gold. Instead Bitcoins are essentially mathematical codes. Each one is unique.
The open-source code was released into the wild in 2009 and tech diehards immediately flocked to the currency although it didn’t have much value at the time and for the first two years it was nearly worthless.
A Rollercoaster Ride to $1,000 Per Bitcoin
Finally in early 2011 Bitcoin started to gain some actual value, at least in relation to the US dollar.
It was worth a few dollars for the first few months of the year but by May it started to climb. Bitcoin exchangers - where you could trade Bitcoin for fiat currencies like US dollars - started to pop up. Bitcoin peaked at $30 in early July and then crashed.
That volatility was just a sign of things to come and in 2013 the unthinkable happened and Bitcoin soared past $1,000! To put things in perspective just three years earlier Bitcoin was worth pennies.
Bitcoin was big business as major investors like Facebook’s Winklevoss twins and Marc Andreessen.
The bubble burst, however, and Bitcoin was sent spiralling down to under $200 over the next two years.
There have been numerous other digital currencies that have tried to copy Bitcoin, such as Litecoin, Dogecoin and Darkcoin but none of them have really caught on.
But How Does it Work?
Bitcoin is based in math. Instead of being represented by actual gold or some similarly valuable material Bitcoins are created when people with powerful computers dedicate their machines to verifying and recording payments on the public ledger.
You could almost say that Bitcoin is created by Bitcoin.
When a computer finishes verifying a block, it is rewarded with 25 bitcoins. This is called Bitcoin mining.
Bitcoins become much harder to mine and conceivably more valuable as time goes on because there is a finite amount and the algorithms behind verifying the transactions becomes more and more complicated.
For a period of time Bitcoin “mining” became popular as Bitcoin enthusiasts rigged together massive computing systems capable of crunching the complex math behind the the Bitcoin block chain and eventually earning the owners coveted bitcoins.
The problem is that the math behind Bitcoin became so complicated that all but the most advanced miners weren’t able to generate enough coins to make it worth their while.
The vast majority of people that use Bitcoin never have anything to do with the mining part of the technology.
What About for Poker?
Bitcoin represents a unique opportunity for poker.
Because Bitcoin is decentralized and not even treated as an actual currency in many countries the government doesn’t care if people gamble with it.
Theoretically that means that the government in your respective country doesn’t decide if you’re allowed to play online poker.
Bitcoin also makes for incredibly easy deposits and withdrawals to online poker sites. Because Bitcoin is entirely digital it takes seconds to transfer them.
Online poker sites will no longer be processing your cashouts and you won’t have to wait for a cheque or wire transfer. Instead you just take your coins out instantly. If you want to trade your bitcoins for currency in your respective country, however, you’ll have to to a Bitcoin exchanger, which is completely unrelated to poker.
But is Bitcoin Safe?
That’s up for debate but there’s certainly more risk involved with Bitcoin than regular cash.
Bitcoin is obviously incredibly volatile (although it has levelled off a bit in recent years) and there is a chance it will be de-valued completely some day. Even Bitcoin enthusiasts have to admit there is some risk involved.
On the other hand Bitcoin might be considered one of the safest currencies in the world because it isn’t tied to governments or even commodities like gold.
Perhaps the strongest case for Bitcoin is that this is something people want. A global, potentially anonymous currency, that can be transferred in a matter of seconds with zero transaction fees.
There’s a good chance the demand for such a currency will eventually outweigh the concerns and a digital currency will explode in popularity. Is it Bitcoin? Only time will tell.
How To Bitcoin
You don’t have to be an expert in Bitcoin to use it for poker.
Playing on Bitcoin poker sites is as simple as acquiring some bitcoins, transferring them to an online poker site.
Actually getting Bitcoins is the most complicated part of the process. You’ll need to go to an exchange and you’re also going to need a Bitcoin wallet.
What’s a Bitcoin Wallet?
You might think a wallet is a place to store Bitcoins but it would be more accurate to say a wallet stores the information necessary to transact Bitcoins. Bitcoins cannot be separated from the Block Chain and when you buy bitcoins you are technically just buying ownership of part of the Block Chain.
Bitcoin wallets can be categorized into four basic kinds:
This is the most common style of wallet and the easiest to use. You simply go to a website and enter your information to instantly have access to an always-on wallet. One upside to this approach is that if your computer crashes and you lose all your files then you still have your Bitcoins. Detractors to this approach would say that having them online all the time makes them susceptible to hacking.
This isn’t a problem for most people, however, as it’s one of the most popular methods to store bitcoins.
This is the same as the online wallet except you actually download software to act as your wallet. These are considered slightly more secure than the regular wallet.
This might sound strange to someone unfamiliar with Bitcoin but because the currency is essentially a string of numerals you can print it on phsyical things. In the past users have printed their Bitcoin codes on novelty coins but you could use anything including wood, plastic or plastic. You could also just write down on a piece of paper. Whatever you do don’t lose that piece of paper though!
Hardware wallets are just physical wallets that store your information digitally. It’s essentially like a specialized flash drive. This is a good way to store a lot of bitcoins if you don’t trust having it online or on your computer at all times. Again, if you lose your hardware wallet then you’ve lost your wallet.
What’s the Difference Between Single-Sig and Multi-Sig Wallets
Multi-signature transactions are a relatively new, arguably more secure way, of making Bitcoin transactions.
Multi-sig wallets add another level of security and gives users access to a form of escrow. Make a purchase online? Your transaction will send one signature but not all of them until you actually receive a product for example.
Where Do I Purchase Bitcoins?
This is a complicated issue in the Bitcoin world.
You probably don’t have a super computer so you’re not going to be able to mine bitcoins. You could ask a friend if you’re just looking to get a small account balance on a bitcoin site and then reimburse them in real life.
There are also limited Bitcoin ATMs spread throughout the world where you can take cold-hard cash to the ATM to get Bitcoins.
The most common way to get bitcoins, however, is to use an exchange.
Exchanges let people trade fiat currencies for bitcoins while charing you a small fee. The problem is that right now these exchanges exist in a grey area of the law.
Many governments are concerned these exchanges could be used for money laundering.
It used to be a crap shoot deciding what exchange to use as some of them were shut down outright, leaving their costumers without millions of dollars worth of bitcoin.
It was even estimated that 45% of bitcoin exchanges have failed in the last few years.
The industry is changing, however, and there are now many exchanges based in the US that are considered more secure.
The problem - for online poker players at least - is that these sites need ID & phone verification which might be a problem for US players looking to play online poker.
There are some alternatives to buy bitcoin anonymously, however, which is useful for people who want to remain anonymous.
So What’s the Best Bitcoin Exchange?
That’s a very tough question and you’re probably going to have to do some research on your own.
The bitcoin exchange industry is so fluid that it changes on a month-to-month basis. You can check out review sites like TheBlockChain.com, which actually grade exchanges.
Regardless you’re going to have to do a bit of research before taking a gamble on an exchange.
What’s a Bitcoin Tumbler?
A Bitcoin tumbler is a simple tool that lets you anonymize your bitcoins by splitting your coins between several wallets and then sending them in parts to a wallet that’s not tied to the user.
In other words it “tumbles” your bitcoins until they are unrecognizable as yours.
What Are Bitcoin Poker Sites Like?
The quality varies considerably but most poker players should be right at home if they’ve ever played online poker.
Because Bitcoin poker is relatively new the software is sometimes a little more rudimentary then what we’re used to from modern online poker technology.
Quite often Bitcoin poker sites are also relegated to in-browser play so that you can play on any device including mobile without having to download any software at all.
The combination of no-download software and Bitcoin is one of the simplest, most accessible ways to play poker. All you need is a device that runs an internet browser and that’s it.
Of course no-download software has it’s limitations (it’s difficult to play more than a few tables at a time) so some Bitcoin poker sites have been introducing full desktop client versions that are actually quite good. Most of the time these software platforms are built on pre-existing poker software that’s used on some of the mainstream poker sites but there are also some independent ones.
There are regular online poker sites that have just started accepting Bitcoin in addition to normal currency.
These sites tend to have very good software but because they accept real cash they may not be able to provide poker in your particular jurisdiction.
One difference between Bitcoin poker sites is that some convert your Bitcoins into chips for play on the site.
One difference between Bitcoin poker sites is the way they handle deposits. Some sites will hold a Bitcoin account balance for you while others sites are experimenting with never actually holding your funds.
You log in, your Bitcoin are reserved momentarily for wagering in the poker game and then you log out and the amount that you won (or lost) is sent right back to your Bitcoin wallet. These types of sites are quite secure because if they crash while you aren’t actively playing than it shouldn’t have any effect on you.