Bitcoin may still be an unfamiliar term to many people as it’s, without a doubt, the newest “product” that’s available to consumers today.
Even if the term e-wallet is foreign, most people are familiar with e-wallet payment methods such as PayPal, Neteller, and Skrill. These are also relatively new to the financial community, but they provide easier and efficient ways of moving money from one person or business to another.
When we talk about Bitcoin, on the other hand, it’s not only a payment method, but it’s currency in its own right. It has been referred to as a cryptocurrency, or some may call it a virtual currency but, in any case, it’s money.
The unique thing about Bitcoin is that it is money, but it’s not tied to a bank, financial institution, or even a particular geographic location. It can be converted to different exchanges depending upon the site of the customer, but on its own, it’s simply Bitcoin.
It is quite confusing to people who haven’t used it and even when they have; it’s still such a foreign concept that can be hard to grasp. This cryptocurrency has its own fluctuation valuation that has changed drastically throughout the past five years. If you pull up value prices, you’ll see that it all reads like the stock market with current worth estimations rising and falling. Overall, though, the value has grown significantly since its inception.
At the time of this writing, the currency was priced around the $2,800 mark in US dollars. The highest since 2015 was recorded as $2,922 and the lowest $200 in that same timeframe. No, we didn’t forget a digit. Going back to 2012, and Bitcoin could have been purchased for just $4.60.
2013 marked the upswing in this brand new endeavor with a 5,000% price increase during that year.
Bitcoin has been widely debated. Some theorize that it will eventually vanish, but CNBC has reported that an analyst, Kay Van-Petersen, who correctly predicted it would reach the $2,000 mark (while it was still being traded at $754), has put forth another forecast. He feels that in ten years this cryptocurrency has the potential to reach the six figure mark through a 3,483% rise in value from today’s record high. That’s $100,000 per Bitcoin.
As far as the use of Bitcoin, that’s also a subject requiring clarification. It’s a currency that’s exchanged online and provides for anonymity for both parties concerned. Whereas a bank transfer or any other non-cash payment has personal information tied to it, the virtual currency is a wallet to wallet transaction without anything else attached to it.
We equate a Bitcoin transaction to an offline cash transaction. Jane Doe goes into a grocery store and purchases a candy bar for $1.00. She hands the cashier the dollar and takes the candy bar home with her.
That cashier and the store itself has no information whatsoever on Jane Doe. They don’t know her name nor her banking situation. It was a simple cash transaction.
Jane also has no banking information regarding the store. She has no debits recorded from her account to theirs, so they are just as anonymous behind the scenes.
Bitcoin takes that very same scenario online. The customer and the recipient (person or business) each has a wallet address and one wallet transfers to the other. Plain and straightforward with no additional information required.
For anyone who hasn’t conducted or seen a Bitcoin transaction, the code needed for the transfer is quite long. It’s not like a PayPal or an e-wallet transfer where you simply put in a password that you remember and approve an amount to be moved.
Let’s use an example of a player transferring money into a sportsbook player’s account using Bitcoin.
The player would go to the cashier and initiate a deposit. The sportsbook then provides that customer with their quite lengthy address to accommodate the incoming funds. The player copies that address and pastes it into his or her Bitcoin wallet provider along with the amount to be transferred. Usually, there is an option to transfer in Bitcoin or convert to a local exchange currency.
Once the transfer is set into motion, it can take anywhere from a few seconds to 20 minutes or so depending upon the overall Bitcoin usage at the time. We have seen cases where it has taken over 24 hours, though. So, it’s never a sure thing, but the few second-turnaround is more the norm.
The beginnings are a bit fuzzy. Although most of the trading action kicked into gear in 2012, this cryptocurrency was introduced in 2008 by a programmer or programming group using the name Satoshi Nakamoto. The name is most likely fictitious as there hasn’t been much information to have surfaced about Satoshi Nakamoto.
The founding principle was to establish a peer to peer system. It was the first money exchange program to eliminate the need for any intermediary like a bank and also not have ties to one geographical location or government overseer.
We will say that today, with all of the Bitcoin exchanges, there is more intervention and more middlemen than we believe was originally intended. However, there still isn’t one governing body. It is a global decentralized digital currency that makes it easy to conduct transactions, especially for online gambling purposes.
The popularity, as well as the value, has increased exponentially throughout the past five years. If we go back to that pivotal year of 2013 when the value rose by 5,000%, there were still only about one million users. Fast forward four years and there are now up to an estimated six million people with Bitcoin wallets that regularly use this form of payment.
It’s expected that the overall supply of 21 million Bitcoins will be reached in distribution by the year 2140. Currently, there are 16.3 million in circulation, and when it reaches the 17 million mark, that’s when we may see that $100,000 valuation come into play as predicted.
We’re going to take the easy route here as far as getting started with Bitcoin wallets and using this one-of-a-kind currency.
If you’re familiar with Bitcoin at all, you probably have heard the term “Bitcoin mining” which was the only original way to start out with this new and unproven cryptocurrency.
Mining is relatively complicated especially for computer programming novices but it is a way to get more value out of Bitcoin, and many miners have turned it into a hobby that they both profit from as well as enjoy.
Mining requires an initial investment as well as equipment and takes about four and half months after the initial investment to reap the benefit. In very simplistic terms, miners are like employees of the Bitcoin “company, ” and they are helping to keep the record of all of the various Bitcoin transactions that are being sent and received.
The transactions are called blockchains, and for the user, provide for a simple ledger system with money in and money out. Someone needs to program these chains and update records, and that’s where the miners come in who are paid in Bitcoin for their services.
However, if you’re an old-school accountant, we don’t want to mislead you into thinking it’s as easy as all that. Don’t leave your day job for Bitcoin mining.
Bitcoin is a safe way to move money, so it wouldn’t be open access to anyone that wants to get involved in managing these blockchains. What the miners are doing is competing using math and programming skills to “seal off a block” through something called a hash.
It takes lots of skill to develop a hash, but it’s a way that data is preserved and kept safe as the programming is constantly changing. So, when someone does successfully seal off a block, he or she (or the group) receives an incentive of 25 bitcoins. The blockchain is then updated, and miners start all over with a new math problem trying to claim the next incentive.
Let’s put all of that mining aside though. Most customers are going to elect to simply purchase through a Bitcoin exchange like unichange.me or coinbase.com, so let’s get into Bitcoin using an exchange.
A service like coinbase does make things quite simple even for brand new users of this cryptocurrency. You can set up your wallet, and then buy and sell Bitcoin using your own bank account or credit card. This method brings up a good point, though. If Bitcoin were truly anonymous, there wouldn’t be tracking of any funding plan.
That’s why we started out with the Bitcoin mining information. Miners truly are anonymous and don’t need to provide any traditional banking or personal information.
Using banking information with an exchange does expose your name and financial institution but using the Bitcoin for payments does not. The Bitcoin exchange will maintain your wallet, but you send and receive without providing anything more than the wallet address.
So, for funding a player’s account, you would open up a wallet account and support it through your choice of available options and then you have your Bitcoin amount from which to process your transactions. You would get the transfer code from the sportsbook and then go to your wallet service and paste that address and then click send. It’s as easy as that.
Now that you know a bit more about this one-of-a-kind system for financial transactions, you can easily see how it’s an ideal way to deposit and cash out from sportsbook and other online gambling providers.
The huge benefit to Bitcoin is that your transactions will go through. You’re not at the mercy of your bank or credit card company that may or may not opt to approve gambling-related debits or credits. Even e-wallet providers have some guidelines that may hamper your plans to turn in that betting slip before the 7 pm game.
A provider like PayPal might decline a transfer if the account holder used a credit card to fund their PayPal balance initially.
Not only are you not providing any traditional banking information but these transactions are not being approved (or not) by any governing body. Remember, this is a peer to peer system.
Despite the fact that Bitcoin is one of the easiest to use and provides for fee-free transactions for customers, it is still not widely accepted through UK, Australian, European, and Asian bookmakers. It may be the pricing fluctuation that scares off these operators but there is high demand for the service and, in just a short time, we could start seeing these sportsbooks add Bitcoin to their financial menu.
It is accepted through bookies that service American and Canadian clientele, though. US players are very limited in their options for funding a player account as they need to use offshore operators, so Bitcoin just makes sense. Top providers like Bovada, 5Dimes, Intertops, Bookmaker, and BetOnline all accept Bitcoin for deposits and withdrawals. They also keep those transactions exempt from the fees they typically charge.
On a site like Bovada, using bitcoins makes good economic sense in addition to its easier acceptance. Bovada charges 4.9% on Visa transactions, 6.9% on Mastercard, and a whopping 8.9% on American Express usage so we would think that players would select zero fees when considering the alternative.
Canadians are also provided with the option through several bookmakers. Bodog is a top Canadian betting service and, although its limits are lower because Bodog is a recreational bettor’s site, Bitcoin users can deposit and withdraw as little as $20 (CAD) and can withdraw up to $3,000 by opting for the virtual currency.
We’ll keep it short and sweet for you. Bitcoin use eliminates those frustrating fees that can be tacked on, especially when it comes to US-facing sportsbooks. It is rare that you find transactions that are entirely free for American players, but this currency is a solution to that.
In all fairness, though, unless you’re a miner and not using an exchange, you are most likely going to pay some fee. Exchanges charge for converting traditional currency to Bitcoin and vice versa.
An exchange like Bitstamp charges .25% for transactions that total less than $20,000 a month (USD). Local Bitcoin is entirely free for buying and selling and waives a transaction fee for transfers to other Local wallets. Coinbase charges a flat deposit and withdrawal conversion fee of 1.49% using a bank account and 3.99% using a credit card for funding.
So, while the sportsbooks are not charging any additional fees, savvy users will want to shop around for the best overall program to eliminate any funding or transaction fees, or at least get them down as low as possible with a service like Bitstamp.
To use Bitcoin for sportsbook funding is probably the most straightforward process you’ll come across as long as you’re comfortable using your Bitcoin wallet.
We kicked off this article by illustrating that the wallet transactions boil down to a basic money in and money out procedure by providing a long code that’s shared between the sender and recipient. For funding a player’s account, the customer will select the Bitcoin option, receive a code from the bookmaker, and the paste it into their “send request” from their wallet provider.
Then, they would just wait a few minutes, and the player account should show a deposit amount that’s been converted into a traditional currency of choice unless they’re on a Bitcoin-only book like Nitrogen Sports where everything is conducted in Bitcoin, and no exchanges are made.
Regarding the amounts that can be transferred, they are set by each sportsbook. The minimum specified amounts are usually lower than other forms of payment, and the maximums are much more generous.
If you take Bookmaker.eu, for example, their Bitcoin withdrawals start out as little as $50 and go up to as high as $25,000. With any other financial methods, you need a minimum of $100 to cash out, and the maximum is $3,000, so that’s quite a big difference.
The turnaround time, as we previously mentioned, is usually just a few minutes and sometimes even within a few seconds. There have been some instances where transfers were delayed due to heavy usage or other unforeseen things that arise, but it’s rare. Bitcoin typically allows for very fast processing in both directions.
Bitcoin is a great fit for gambling transactions simply due to the nature of its premise. It’s a private way to transfer money and declined transactions are very atypical.
Benefits in conjunction with sports betting include:
Well, not all of them have. As we’ve mentioned, sportsbooks that allow for American and Canadian clientele are more apt to offer and even encourage the use of this virtual currency suse by its players.
Legislative action in both countries has made it difficult for players to transfer money from traditional banks or cards into an online gaming account, especially in the US where the laws are the strictest. Bitcoin is a way for sportsbooks to get their players up and rolling without the hurdles to jump through with other financial institutions, so you will see the majority of operators that allow Americans to register and bet provide the option.
A sportsbook like Bookmaker.eu even presents additional benefits to players who utilize this virtual currency. They provide more bonuses, loyalty program upgrades and, of course, free payouts whereas there are fees associated with other methods.
Bovada has a special welcome bonus of 50% up to $500 for anyone registering and using virtual currency, and it also allows for unlimited Bitcoin withdrawals so, essentially, players have much greater payout possibility. Topbet also provides more benefit through a 100% match welcome bonus up to $1000 for Bitcoin customers as opposed to a 50% match up to $250 for Visa users.
Intertops has offered Bitcoin for quite awhile and still currently accepts it but its stipulations are a bit more stringent. Intertops used to accept very generous limits of transactions using it but then suspended all use for awhile which did not sit well with its loyal players. It now offers this payment alternative again but for withdrawals up to $2,500 only.
Ironically, Irish-based bookmaker, Paddy Power allows for betting ON Bitcoin but not betting with it. Bitcoin valuation is one of their financial betting options and, although there has been discussion about Paddy Power accepting it for account funding, it has yet to make that leap.
What are the restrictions imposed by Bitcoin for new wallet holders?
There aren’t any. Bitcoin is not a conventional currency that’s being managed by a business or government. It’s a peer to peer system and, therefore, there aren’t restrictions including age requirements.
If I deposit to a player’s account using Bitcoin, can I withdraw using another method?
Every bookmaker has their own set of rules but, in general, operators mandate that if you deposit with Bitcoin, you withdraw with Bitcoin.
If I win and accumulate some Bitcoin, can I convert it to a traditional currency?
Yes and No. No, the sportsbook won’t turn it for you but, yes, it can be transferred to a bank account or credit card through an exchange like the ones we’ve mentioned.
We’ve covered a lot of the ins and outs of Bitcoin and how it relates to sports betting by making it easier for players to fund a bettor’s account, especially for Americans who are extremely restricted in their options.
There still is so much to learn about this relatively new and extremely distinctive virtual currency. Sites like Bitcoin.org can provide more information overall, and the numerous exchanges that are now online each have different benefits and a different structure for use, but make it easy for anyone to own a Bitcoin wallet and use it.
Bettors who opt for Bitcoin will find that it’s one of the quickest and easiest ways to get going as well as receive funds. Aside from approval and processing time, the payouts should be just as fast as the deposits, and with sportsbooks now offering additional perks to Bitcoin customers, there can be a lot of extra value in addition to enjoying fee-free transfers.