By Troy Lambert
There are many reasons Bitcoin is so popular as a digital currency, the chief of these being that it has features and values that could only exist in a digital world.
After all, what is money if it is not a way of sharing value? But bitcoin is not a digital form of traditional currency like a credit card. Rather, it is its own entity that is “mined” by solving complex mathematical equations. The result of this is that the Bitcoin network gains computing power, and the “solver” gains a string of digital code that has a value set by a group of people who agree on that value.
Unlike traditional currency, Bitcoin is not and cannot be centralized. However, it offers several features that make it particularly suited for those who want to engage in online gambling.
Online gambling, particularly sports betting, is a field where it is possible to make a profit, but those profits can often be marginalized by several factors including transaction fees. Even users who gamble for fun rather than with the aim of actually making money can have their winnings marginalized by fees.
These fees are how sportsbooks make their money: they have no stake in the game, and it does not matter to them who wins or loses. According to SBGGlobal.eu, online sportsbooks make their money by charging a vigorish, and in fact, try to get equal action on both sides to guarantee they make a profit. You are really competing against other online betting players, not the sportsbook.
Online gambling sites must comply with state and local laws in part due to currency regulations. For instance, in the United States sports gambling is forbidden by the Professional and Amateur Sports Protection Act (PASAPA) passed by Congress in 1992. Only four states, Nevada, Montana, Oregon, and Delaware are exceptions as these states were grandfathered in under the law.
Online sportsbooks in particular must comply with this regulation, although the Supreme Court is hearing a case in October that may change that entirely. While bitcoin could be a way to circumvent some such laws, it is not why sportsbooks, online casinos, and gamblers are using bitcoin instead of traditional currency. There are more and better reasons to use bitcoin in the business of online gambling.
Aside from legal reasons, gambling often carries with it a certain social stigma even if a person simply does it for fun or does not suffer from any kind of addiction.
There are others who gamble with the idea of making a profit, especially in the sportsbook world, and Bitcoin's pseudonymity enables them to do so privately and apart from the judgment, moral or otherwise of people around them.
Private keys with strong passwords and keeping most of your Bitcoin in cold storage will keep your money secure, much more secure than other forms of payment. Keep your Bitcoin out of online wallets as well.
If you use credit cards or PayPal online if the website you used them on gets hacked, your information has also likely been hacked or will be the hacker’s next target. It can take you months to recover from such a hack.
Bitcoin is one of the most secure currencies out there as long as you take your security seriously. If anyone is asking for your private key or wallet password, they are trying to steal your money. They never need that information to process a transaction.
On the flip side, there are many phishing schemes and social engineering schemes that can mimic online sites and trick users into giving away private financial information. These are much less likely to succeed with Bitcoin.
Speed of Payments
When dealing with sportsbooks and online gambling sites, especially those that are internationally based, it can take a tremendous amount of time for ACH transactions and international transfers to clear, sometimes a week or longer.
Even with recent transaction delays due to block size, Bitcoin is still much faster. Most transactions are almost instantaneous and nearly all are completed within a few hours. Worst case scenario, funds will rarely take a day to clear.
If gamblers are dealing with reputable sites, they should have access to funds the same day, next day at the latest.
Transaction fees are much lower with Bitcoin than with other forms of payment. As mentioned above, these fees can seriously dip into a gambler’s winnings.
Not only is using Bitcoin better for the gambler, but it is also better for the online betting site or sportsbook. They save a huge amount in fees when a user funds their account with Bitcoin instead of traditional currency.
Bitcoin was born on the internet, and is tailor made for digital use. Credit cards and bank transfers were never meant to be used online the way they are now, and although financial institutions are trying to catch up, there are still significant security risks and delays involved with many types of transactions.
Bitcoin instead offers users a great deal of privacy, security, ease of use, and financial savings, making using bitcoin online a win-win for everyone.