The Bitcoin or BTC is possibly the world’s first successful decentralised “crypto-currency”. Developed by Satoshi Nakamoto in 2009, Bitcoins are transferred directly from person to person and free from financial or legal regulation. Backed by military-grade key access and cryptography, all transactions made with Bitcoins are secure and verified.
The Bitcoin “protocol” is programmed to increase the virtual money supply gradually until the total number of Bitcoins in circulation reaches 21 million in the year 2140. Bitcoins are generated by heavy duty computers “hashing” transaction records and earning Bitcoins as payment – which can then be converted into cash or traded at the software owner´s discretion.
Most people using Bitcoins as a virtual currency now buy and sell their BTCs in Bitcoin exchanges – the most popular being https://btc-e.com/ – after having set up a Bitcoin Wallet via https://coinbase.com/ or one of several other Internet based wallet providers. Anybody who has used an online e-wallet before (PayPal, Neteller, Skrill, etc) will have no difficulty in operating a Bitcoin account.
What are the Advantages of Bitcoins?
In terms of playing online poker with Bitcoins, there are three main advantages.
- No Third-Party Seizure
If everybody was using Bitcoins to play online poker, there could never be a repeat of Black Friday. Governments have no power to seize Bitcoins (which is why so many Cypriots purchased Bitcoins during their recent banking crisis) and Bitcoin owners have complete freedom to do anything they want with their money.
- No Taxes
Legislators in the States (and France and Spain and Italy) have all become in favour of online poker since they realised that there was a way of generating tax income from poker players. As there is no way for a third party to intercept transactions of Bitcoins, and therefore no viable way to implement a Bitcoin taxation system, the proceeds from online Bitcoin poker are tax-free.
- Low Transaction Costs
As mentioned on our Home Page, currency exchanges and transaction costs can make a significant difference in an online poker player´s profitability. Sending and receiving Bitcoins requires users to keep the Bitcoin client running and connected to other computers – essentially contributing to the network and sharing the burden of authorising transactions. Those who wish to play online poker with Bitcoins are thereby aiding the success of the Bitcoin network and are rewarded with low transaction costs.
What are the Disadvantages of Bitcoins?
Of course, there are also disadvantages of using Bitcoins to play online poker.
- Bitcoins Are Not (Yet) Widely Accepted
It is unlikely that you will be able enjoy a successful session at the tables, cash out your winnings and celebrate with a fancy meal paid for with Bitcoins. Although more and more businesses are accepting Bitcoin as a form of online payment, it may be some time before they are of any use to you other than to fund an account with poker sites for Bitcoin poker.
- Wallets Can Be Lost
An individual´s wallet file is maintained on their computer (the download is 3Gb – so not suitable for mobile devices). If your computer´s hard drive was to crash, or a virus corrupted your wallet file, the information cannot be retrieved and your Bitcoins are lost. The loss of your wallet does not prevent you from playing online poker with Bitcoins, as another wallet can be set up; but it is strongly recommended that your Bitcoin wallet is backed up onto a removable storage device after every transaction.
- Bitcoin Valuations Fluctuate
The story of the 10,000 Bitcoin pizza illustrates just how much the dollar value of Bitcoins has increased since the introduction of the Bitcoin in 2009 – At April 2013 values, that pizza cost just over $1.5 million! Within a day, the value of a Bitcoin can fluctuate by more than 10 percent (down as well as up) and so cashing out from a Bitcoin poker site a month after you made your first poker deposit could still result in a dollar loss or profit – irrespective of how well or bad you performed at the tables!