The enigmatic Satoshi Nakamoto published the Bitcoin whitepaper in 2009, spurring a cryptocurrency gold rush that lured everyone from seasoned financiers to novice investors to take part in the movement. Before we delve into how you should leverage Bitcoin, let’s first establish what this technology actually is.
Bitcoin is a type of money that is completely digital. It's essentially an online version of cash that you can use to purchase goods and services. Each bitcoin is basically a line of code stored in a “digital wallet" which can be either a hardware wallet, paper wallet, or software wallet. Individuals can send Bitcoins, whole or partial, to other digital wallets. From there, each transaction is chronicled in a public ledger via blockchain technology. This makes it possible to trace the Bitcoin’s history, preventing people from spending coins they don’t have, making copies of coins they didn’t earn, or canceling transactions entirely.
Much like other currencies, you’re able to conduct business with merchants who accept it. However, unlike traditional money that depends on intermediaries like banks, there is no single entity that regulates Bitcoin. Rather, it is overseen and managed by a network of volunteers around the globe who support computers running specialized software.
After experiencing its fair share of ups and downs in the market, Bitcoin has been hailed as one of the best investments in recent times and is currently worth somewhere between $7,000 and $11,000.
The growing hype surrounding Bitcoin and other cryptocurrency offerings has provoked warnings from an array of financial heavyweights on the risks investors should be aware of. Many are also wondering whether Bitcoin gambling is a better alternative than Bitcoin investing.
Why Bitcoin Gambling Can Be Better than Playing with the Market
The Bitcoin market has no rules or regulations
Debit cards, credit cards, and eWallets currently dominate the online gambling space, with players finding these options to be the fastest and most convenient available. Bitcoin delivers advantages that far outperform traditional banking methods.
Online gambling sites first started accepting Bitcoin in 2010; since then, the cryptocurrency has been one of the most popular storage options for gaming sites. While it has been a source of criticism for some time, more and more organizations are coming to the realization that Bitcoin and blockchain, its underlying technology, may be beneficial to the new era of global finance.
One of the main selling points is that Bitcoin is not a fiat currency like the Euro or the U.S. dollar. Fiat currencies are backed by the government, providing a sense of confidence that makes people feel as if their money is safe. Bitcoin does not have this backing nor is easily enforceable as fiat.
Bitcoin is decentralized digital currency and under our current legal system, it cannot be regulated.
The biggest advantage is also the virtual currency’s biggest weakness: a lack of actionable regulation generates anxieties over having no recourse in the event that your money is stolen.
Cryptocurrency gambling is far more secure since there are many licensed markets that have opened up in recent years. Gamblers can take comfort in knowing they are playing in a better-regulated environment, since most casinos serve as a centralized intermediary that prevents bad actors.
ICOs (Initial Coin Offerings) have a Bad Name
According to CoinDesk, buyers contributed more than $256 million to ICOs in 2016, $5.5 billion in 2017, and over $3 billion in the first two months of 2018 alone. Along with their initial wave of popularity, the cryptocurrency world has already seen dozens of scams within a short period of time.
Exchanges are Less Trustworthy than Online Casinos
The online gambling industry offers several opportunities for casual and professional gamblers. And despite appearances, the average online casino is actually a safe place for your money since millions of players freely deposit and withdraw funds each day with no incident. The majority of gambling operators seek out licenses to keep themselves accountable and make sure their players’ money is safe. When selecting the online casino where you’ll play, just be sure to first ensure that it is licensed in a legal jurisdiction. That should be the extent of your concern.
But the cryptocurrency market has more scams to show for it than online gambling. As exchanges have led people to make some decent money, they have also attracted cyber criminals from around the world. Hackers have tried to exploit the vulnerabilities in the servers and payment networks, with many having reported experiencing problems when trying to take out money. There have been cases where sites have been hacked, resulting in the loss of millions of dollars.
Bitcoin is more Volatile than Gambling
Bitcoin has seen many rises and crashes since its inception in 2009. Bitcoin is known for its wild price swings up and down. People tend to expect a lot out of Bitcoin, but many point to the limited upside potential of the asset relative to its potential in its early days. For example, $500 in Bitcoin in 2012 presents an astronomical return when looking at a $10k BTC. But $500 in a $10k BTC means a BTC would have to be worth over $500k to produce a similar return.
Gambling is also uncertain, but it plays to different odds than investing.
According to Peter Diamandis, founder and chairman of the X Prize Foundation, “At its core, Bitcoin is a smart currency, designed by very forward-thinking engineers. It eliminates the need for banks, gets rid of credit card fees, currency exchange fees, money transfer fees, and reduces the need for lawyers in transitions… all good things.”
Bitcoin and its feature-rich blockchain technology will push financial institutions to reconsider their infrastructure. Bitcoin gambling still makes up a fraction of the online gambling industry, but its advantages make it a viable contender for future growth. While it’s hard to make solid predictions from a cursory point of view, we can predict that regulations will need to adjust to suit the new technology. And the technology itself will evolve to enable the monitoring and logging for every part of the supply chain from the players to the games themselves.