A few short years ago, the word Bitcoin was a hot topic amongst only a tiny online community of cryptographic geeks. Fast forward to today and it’s making headlines around the world as everything from a potential saviour of the global financial system to the cyber-criminal’s crypto-currency of choice. Everyone from venture capitalists to national governments are jumping onto the Bitcoin bandwagon and the world of online poker is no exception.
In this article, we’ll take a look at the background of Bitcoin itself before discussing the various pros and cons of Bitcoin poker sites and whether it’s worth signing up and grabbing yourself a piece of the action. Let’s begin with the most obvious question of all.
What On Earth Is Bitcoin?
Bitcoin is an online, peer-to-peer, cryptographic currency and payment system invented by a shadowy, unknown genius by the name of Satoshi Nakamoto. He first touted it as a concept in a 2008 research paper before releasing it onto an unsuspecting world the following year as a fully-fledged open-source payments solution.
Explaining Bitcoin in layman’s terms can be a tricky proposition and some mental gymnastics are often required in order to fully get your head around it. At its simplest, Bitcoin is a particular way of encrypting information and securely transferring it. A unique digital item (a Bitcoin) is created via a process called mining and that piece of property can then be instantaneously transferred between people across the globe without involving any middleman or fees. In terms of online poker, our subject of expertise, Bitcoin is the currency you’ll be staking with.
Bitcoin.org have a great getting started guide worth reading and Venturebeat’s Bitcoin for Idiots provides an informative tongue-in-cheek overview of the concept. The more academic among you may want to consult this Bitcoin paper. Or simply have a look at this excellent overview below from The Guardian:
Astonishingly, to this day, nobody really knows who Satoshi Nakamoto is. A particularly fascinating state of affairs considering his net worth is estimated at anything from $400 million to $1 billion as a result of his Bitcoin stash. Guessing his real identity has become something of an online sport in recent years with notable rumours including him being John Nash of A Beautiful Mind fame, a cover for a massive CIA project and an unsuspecting Japanese mathematician living in L.A. County.
Though its creator’s identity remains unknown, Bitcoin’s future looks increasingly assured. What began with just a few high-profile sites such as Wikileaks and the Electronic Frontier Foundation accepting Bitcoin payment soon blossomed into an fully functioning online virtual currency. As early as October 2012, the payment gateway Bitpay reported having over 1000 merchants on their books who were willing to take payment via Bitcoin.
The price of a single Bitcoin has shown extreme volatility since 2009 but the growth rates are undeniable: from an exchange rate of $1 per Bitcoin back in February 2011 to a staggering high of $1250 per Bitcoin in November, 2013. It’s been on the slide since then however, ramping down through a series of stops and starts to its current rate of somewhere around the $300 mark on any given day.
One of the main drivers of early growth was Bitcoin’s enthusiastic adoption by some of the shadier corners of the internet, the notorious Silk Road in particular. Bitcoin’s allegedly untraceable use in transactions was enough to earn it an early reputation as being the currency of choice for cyber-criminals around the world.
Along with the currency itself, a whole supporting ecosystem of Bitcoin exchanges and trading platforms soon arrived with the aim of making it easier to buy, sell and store Bitcoins. Many informed commentators were quick to express alarm at the essentially unregulated nature of much of this activity. Matters soon came to a head in the biggest Bitcoin scandal to date, 2014’s infamous Mt. Gox meltdown when one of the largest and highest profile Bitcoin exchanges in the world effectively announced that all the “money” it had been holding had mysteriously disappeared.
The repercussions of that one are still being played out in the courts but the end result was perhaps not a huge surprise when you consider Mt. Gox began life as a trading system for Magic: The Gathering playing cards.
Our focus here though is Bitcoin poker sites so let’s get down to the basics you need to be familiar with.
Setting Yourself Up To Use Bitcoin Poker Sites
Before we begin, a word about mining. Hang around the Bitcoin scene for any length of time and you’ll hear lots of talking about mining, the process by which new Bitcoins are created. Unless you’re the owner of a server farm in China, the days of it being possible to do this on your own computer are long gone so feel free to ignore and concentrate on getting your hands on the Bitcoins themselves.
Get In The Game – Setting Up Your Bitcoin Wallet
Before purchasing Bitcoins, you need somewhere to store them and here you have two basic options: a “wallet” stored on your own machine or one managed by an online service. This can be a tricky choice. Opt to store them exclusively locally and you’re at the risk of hardware failure. If your machine goes down, your money potentially disappears with it. If you opt for the online service, you need to do your due diligence and check their track record and approach to security to avoid a potential Mt. Gox scenario.
We recommend Coinbase. It’s backed with serious money from respected investors like Fred Wilson and Andreessen Horowitz and won’t be disappearing off into the night any time soon. They offer full wallet and exchange services.
With your wallet set up on Coinbase, or any other reputable provider, buying Bitcoin should be as simple as hooking up your bank details and selecting how much you want to purchase. There’s a variety of other ways of obtaining Bitcoin such as face-to-face trades or receiving them in exchange for services but, for peace of mind and lack of overall hassle, it’s hard to beat a service like Coinbase. It’s certainly no more difficult than learning the ins and outs of online poker with Paypal for example.
What Are The Main Advantages Of Bitcoin Poker Sites
So, with all that out of the way, let’s consider the advantages of actually using Bitcoin poker sites. There’s three or four big ones that leap out immediately.
- Ease and speed of funds transfer: Many Bitcoin poker sites are claiming cash-out times of as little as 15 minutes up to a maximum of 12 hours. Music to the ears of frustrated players often used to waiting a minimum of 72 hours when dealing with traditional casino sites.
- Anonymity: The initial requirements for personal ID for many of the Bitcoin poker sites have been extemely lenient to date. Not to everybody’s taste necessarily but for some players this will be very attractive.
- A loophole for U.S. players to play: Sites for playing poker with Bitcoin are operating in something of a grey area for U.S. players at the moment as the laws haven’t yet caught up with the technology in every state. An interesting option for US players blessed with a high tolerance for risk.
- A less savvy player pool: Until Bitcoin truly cracks the mainstream, the type of players encountered on many Bitcoin poker sites are often not as savvy as those you’d meet elsewhere online.
A Quick Look At Some Disadvantages Of Bitcoin Poker Sites
- Lack of regulation: Bitcoin itself isn’t the issue. Problems can arise because many of the sites are operating in essentially unregulated environments and may not be able to demonstrate the sort of operational rigour you’d associate with traditional poker sites. Caveat emptor is the watchword here.
- Bitcoin volatility: Depending on your appetite for risk and uncertainty, Bitcoin has shown either massively exciting or incredibly alarming volatility over its short lifetime. One-day drops of up to 40-50% are not uncommon. Factor this possibility in from the outset.
- Potential taxation issues: This varies by jurisdiction. Bitcoin profits still exist in a grey area of accountancy in some countries. Expect this to change pretty quickly worldwide once the taxman realises how much cash is being transferred. Germany, for example, has already made a firm ruling on this.
- Loophole for U.S. players to play: State laws still apply to U.S. players and they should bear in mind that operating in a legally uncertain area is a bet in itself. The U.S. government also has a nasty habit over the years of attempting to apply retrospective judgement in these cases. Proceed with caution.
Some Prominent Bitcoin Poker Sites To Consider
Let’s start with two cautionary tales. Until as recently as the beginning of 2015, any internet search for “bitcoin poker sites” would have thrown up two prominent names: Sealswithclubs and Satoshipoker.
A couple of months later, both sites have shut their doors with the dust still settling on exactly what happened to bring them down. Bear this possibility in mind when you’re signing up for a site. The landscape is brand new, largely unregulated and potentially subject to all sorts of shenanigans so exercise common-sense at all times. And remember, you can always check back here for more updates on the Bitcoin poker landscape in the future.
Find Out More About Bitcoin Poker
There’s a world of useful info out there on the wider web to get fully up to speed on Bitcoin and its use in playing poker online. In addition to the resources mentioned above, check out the great ongoing discussions over at the dedicated Reddit Poker list and in the Poker News, Bitcointalk and forums.
The genie is very much out of the bottle when it comes to online currencies. Bitcoin and its contemporaries such as Dogecoin are here to stay so it’s inevitable that the world of Bitcoin poker sites is only going to get bigger. Get in now and start getting familiar with the lay of the land and you could be well out in front of the pack before you know it. If you enjoyed this article, then check out some of our other info on playing poker online.
Offers from Bitcoin Poker Sites