The first step to buying Bitcoins and exchanging them back for cash is to get a Bitcoin wallet – a network or program that allows you to send and receive bitcoins online. There are a number of websites that offer Bitcoin wallets to new users, and you simply require a username and a password in order to sign up.
The next step is to receive your 33-character Bitcoin address; which will be used to track your Bitcoin transactions. This should be sent to you immediately after you sign up for your Bitcoin wallet and, once you have your Bitcoin address, you will able to buy Bitcoins directly online from any Bitcoin exchange company and use them to play poker with Bitcoins.
Using Bitcoins to Play Online Poker
Your deposits to online poker sites for Bitcoin poker are then the same as if you were using an e-wallet (PayPal, Neteller, Skrill, etc.). Depending on the online poker site, you will either be playing in Bitcoin currency (or fractions thereof) at the tables, or your Bitcoin currency will be converted to an alternative denomination (Dollars, Sterling, Euro) while you play, and converted back at the end of your session.
Withdrawals from online Bitcoin poker sites go directly back into your Bitcoin wallet, from where you can exchange them into other currencies of your choice via a Bitcoin exchange. Please note that despite the quick and anonymous transaction process facilitated by Bitcoin and Bitcoin exchanges, poker sites offering online Bitcoin poker still require that you verify your account before making a withdrawal and may hang onto your Bitcoins for a day or two while your verification documents are being checked out.
Playing Online Poker with Bitcoins – Legally
The legality of playing online poker with Bitcoins is going to depend on the country in which you live. The only three places in the world where online poker is actually considered to be a crime are Iran, North Korea and the State of Washington; but there may be other reasons why you might not be able to play online poker with Bitcoins. For example:-
- The iPoker Network software through which WinPoker offers the opportunity to play poker with Bitcoins is not licensed for use in Cyprus because of the State monopoly on gambling.
- French players are not allowed to play online Bitcoin poker on Switch Poker because the company does not hold a license to offer real money cash games in France.
- Red Star Poker, despite being a skin on the US Revolution Network, does not accept real money poker players from the States because the site´s financial transactions are processed through Malta.
- There are issues regarding the availability or accessibility of the software provided by online poker sites for Bitcoin poker in many different countries, and it is recommended that you read the terms and conditions of any poker room offering online Bitcoin poker before depositing on the site.
However, there is good news for US online poker players (outside of Washington State of course). In March 2013, the Financial Crimes Enforcement Network (or FinCEN – a bureau of the United States Department of the Treasury) issued a report regarding decentralised “virtual currencies”. It classified digital currencies and other digital payment systems such as Bitcoin as “virtual currencies” because they are not legal tender under any sovereign jurisdiction.
FinCEN cleared American users of Bitcoin of legal obligations by saying (Source):
A user of virtual currency is not an MSB (Money Services Business) under FinCEN’s regulations and therefore is not subject to MSB registration, reporting, and recordkeeping regulations.