How To Use Bitcoin at Online Casino - Beginner's Guide
The online casino industry was one of the first to take Bitcoin, the digital currency, seriously. The payments technology provides all sorts of advantages over traditional payments networks. These extend to both the casino itself and the players.
However, using Bitcoin at an online casino isn’t going to be for everyone. A lot of the world already has access to regulated gambling markets and extensive banking facilities. For them, perhaps a good old-fashioned debit card will be more convenient. Other players, possibly those excluded from online gambling previously, will see clear benefits to using Bitcoin payments.
In the following article, we discuss:
- Reasons for using Bitcoin at an online casino.
- Reasons why you might prefer a different payment method.
- How to get hold of and store Bitcoin.
- How to use Bitcoin at online casinos.
- Information about provably fair gambling.
Why Would You Use Bitcoin to Gamble Online?
Bitcoin is the world’s first viable decentralised currency. By not relying on a central entity (like a bank) to either issue or validate transactions, it has some rather unique features that make it totally different to any form of currency we’ve ever known before.
Things that stand out about Bitcoin versus national currencies include:
- Completely fixed supply – There will only ever be 21 million Bitcoin.
- It’s not associated with any one country and national borders do not impact Bitcoin transfers.
- Permissionless – No central entity needs to give a user permission to create an account or transfer funds.
- Censorship resistant – No central entity can stop a Bitcoin transaction.
- Accessible – Bitcoin users only need an internet connection and a device with which to browse.
- Very low fees – Since the network itself takes care of security, users do not need to pay exorbitant transfer fees associated with banking services.
- Pseudonymous – Bitcoin wallets do not require any identification to setup. Bitcoin can, therefore, be used with a much higher degree of anonymity than other payment networks. It’s not completely private but is much more difficult to link a transaction to an individual than most money transfer services.
Some of the above reasons make Bitcoin a natural fit with online gambling. Online gambling requires players send money, often across national borders, and for the casino to be able to send money back to them. Since Bitcoin removes banks entirely from the process of transferring funds, Bitcoin online casinos do not require relationships at all with banking institutions. The money they save on banking fees, they can pass on to the players themselves in the form of better RTP rated games and juicier bonuses.
Bitcoin is also somewhat private and it’s impossible to censor transactions. This can make online gambling in parts of the world where it’s illegal a possibility. Traditionally, banking service providers from nations where online gambling is prohibited would refuse to transfer funds to and from casinos. Bitcoin, by contrast, has no authority that can judge the purpose of a transaction. Literally no one can stop an individual sending money to a Bitcoin casino via the network.
Finally, Bitcoin transactions are relatively fast. They are settled with absolute finality within just a single hour. Compare this to any of the other popular payment networks serving online casinos today. Transfers with the likes of Visa, Mastercard, bank transfers, and cheques, all take between a few hours and a week to settle.
This has a major implication on the way people use their bankroll at an online casino. Rather than leave a bankroll at an iGaming venue after a session, players can instead withdraw it. It will arrive in their Bitcoin wallet within an hour. If you tried that with a fiat currency deposit method, you would be waiting a couple of days before you could deposit again.
With Bitcoin you can even withdraw from one casino account, directly into another! This means your entire bankroll can move between casinos in the space of an hour – a clear advantage for players who might struggle to trust an online casino or high-volume gamblers who might play at many different casinos regularly.
Why Wouldn’t You Use Bitcoin at an Online Casino?
As you can see, there are some pretty good reasons to use Bitcoin at an online casino. However, for a large number of casino gamblers, it might not represent the best option.
You see, Bitcoin is ideal for those players who might lack access to traditional banking facilities or who live somewhere that iGaming is illegal. A casual player, playing in a fully-regulated market, might not see the benefit of being able to move funds quickly from one account to another or not feeling obligated to leave their entire bankroll on one casino site. They also probably have access to other payment methods that are more convenient and don’t see the need to keep their activities covert.
For those of us fortunate enough to live in places like the UK, with an active online gambling market, excellent player protections, and great access to banking facilities, Bitcoin might be too much like hard work. However, in other parts of the world, it might represent not only the best but, in fact, the only way people can play casino games online.
How to Get Bitcoin
Now we know who might want to use Bitcoin to gamble online, we’ll go through exactly how you can get hold of some.
There are a few different ways detailed below:
Buy Some from a Friend
The easiest way to get some Bitcoin is to buy some from a friend or someone you know who might already have some. You don’t need to register for any accounts. You will only need to sort out some proper storage (advice on this later), give your friend some fiat currency, and have them transfer the Bitcoin to your wallet. You will also save on exchange fees unless your friend is really stingy!
Buy from a Peer-to-Peer Marketplace
Another way to get hold of some Bitcoin is to use a peer-to-peer exchange like LocalBitcoins or Paxful. These services are a little bit like eBay, in that sellers of Bitcoin advertise different rates and payment methods that they’ll accept. Meanwhile, buyers browse from the available listings to find one that suits them.
Peer-to-peer market places don’t accept the payments on the buyer’s behalf. It’s, therefore, up to the seller themselves to specify how they want paying. The Bitcoin is locked into an escrow system until buyer confirms they have sent the payment and seller confirms they have received it.
The exact method you use to buy the Bitcoin will depend on the payment method favoured by the seller. Popular payment methods on peer-to-peer market places include: debit card, bank transfer, bank deposit, cash in person, and ewallets, as well as even more obscure methods like Amazon gift vouchers.
Buy from an Exchange or Brokerage
Perhaps the most popular way for people to get hold of Bitcoin is by using an exchange or brokerage platform. There are loads of different services like Coinbase, Kraken, Poloniex, or BitStamp that allow you to deposit in their local currency using either bank transfer or credit/debit card payment. You can then use this to buy Bitcoin.
First, you’ll need to create an account with an exchange or brokerage. This is as easy as filling in a few digital forms – much like creating an online casino account. Then, you need to fund it. Again, this is similar to depositing to an online casino. The main difference is that the exchange will accept fewer payment methods in accordance with regulations.
Once you have funded your account, you need to actually buy some Bitcoin. This is more straightforward on a brokerage but you’ll probably get a better price on an exchange. After you have made your purchase, you should then withdraw it immediately to an appropriate wallet.
Exchange wallets are often a target for hackers and many people have lost money as a result of security compromises over the years. We cover proper Bitcoin storage later in this article.
You can get some Bitcoin without actually buying it too. These days, there are plenty of opportunities for freelance workers and other professionals to get paid directly in Bitcoin. Perhaps you work remotely for some cutting-edge industry or your boss on the other side of the world just wants to save on bank transfer fees.
Lots of people already get paid in Bitcoin. However, we’re going to presume that you don’t fall into that category if you’re reading this beginners article to Bitcoin casinos. If you did, you’d probably already know all about Bitcoin storage and the advantages of Bitcoin payments over other payment technologies.
Proper Bitcoin Storage
Although this article is really about how to use Bitcoin at an online casino, we’ve decided to detail how to store Bitcoin correctly first. This is because setting up your storage system for Bitcoin is going to be the most important step to using Bitcoin safely and securely.
There are all kinds of different storage methods for Bitcoin. Some of them are more secure than others. Before we detail the most popular ones, let’s first be clear about what a Bitcoin wallet actually is.
The name “Bitcoin wallet” is a little bit misleading. It implies you store actual Bitcoin inside something. In reality, a Bitcoin wallet is just a pair of cryptographic keys. One is public and users can choose to associate Bitcoin with it by transferring BTC to that address. This is also known as a receive key or address. The other part of the wallet is known as the private key. The private key is the single most important aspect of the wallet.
Only the person who knows the private key to a wallet can use the network in the fully-permissionless way it was intended. This means you share it with no one.
When you use the storage options at an exchange, the company keeps the private key on your behalf.
A popular saying relating to this in the Bitcoin industry is:
“Not your keys, not your Bitcoin.”
It refers to the fact that an exchange platform needs to give you permission to withdraw your Bitcoin. It’s much better to hold it yourself for security reasons.
Different Forms of Bitcoin Storage
Hot Wallet: A hot Bitcoin wallet is any Bitcoin wallet that has been or is constantly connected to the internet. They are often more convenient to use but lack the security of cold wallets.
Types of hot wallets include:
- Custodial wallets – Any wallet that does not show you the private key or a pneumonic seed phrase relating to it is a custodial wallet. You’ll find them at exchanges like Coinbase, Binance, Bitstamp, and peer-to-peer marketplaces like LocalBitcoins. We do not recommend using custodial wallets for anything but services associated with the company hosting them.
- Non-custodial hot wallets – Desktop wallets and wallets on your mobile phone are much more secure than custodial wallets. Examples like Exodus, Electrum, and others all allow full functionality of the Bitcoin network and are good for use with online casinos. We don’t recommend desktop or mobile wallets for longer term storage of larger amounts though.
Cold Wallet: A cold wallet sacrifices some convenience in the interest of security. Given that the private key on a cold wallet has never been near a live internet connection, having your private key stolen is almost impossible without someone physically taking the wallet or backup record of your keys. Cold wallets are much better for longer-term storage but some users might find them inconvenient for use at online casinos since making a transaction from a cold wallet is a bit of a more involved process.
Types of cold wallets include:
- Hardware wallet – Devices like those made by Ledger and Trezor are purpose-built hardware wallets. Transactions are signed offline making them incredibly secure. This means you can use the same private key more than once, sending and receiving funds as you please with an almost zero percent chance of private key compromise.
- Paper wallet – A paper wallet is the most secure form of Bitcoin storage. It involves creating your own private key and public key using an offline random number generator. The whole process is too complicated to explain here but a properly created paper wallet is almost impossible to compromise. However, a poorly created paper wallet is a security risk. We, therefore, recommend those novice readers wanting to store their Bitcoin safety, to check out the various hardware wallets available today.
If you’re wanting to just use a small amount of Bitcoin at an online casino, we advise using a desktop wallet as your storage method. They’re convenient, much safer than custodial wallets, and give full permissionless access to the Bitcoin network.
If you have an investment in Bitcoin that you’re wanting to keep hold of but enjoy gambling with a smaller amount of Bitcoin, we recommend using a combination of a hardware wallet (for your long-term position) and a desktop wallet to send casino deposits from and to.
Using Bitcoin at an Online Casino
If you’ve completed all the steps so far, you’ll be pleased to know the most complicated stuff is behind you. We’re going to presume that you already have your Bitcoin casino bankroll in a desktop wallet, waiting to be sent to a casino.
To actually start using the digital currency at a casino, just follow the steps below:
- Find a suitable Bitcoin casino from those we recommend. Click the link to the site’s homepage.
- Read the terms and conditions associated with any signup offer you might want to be claiming.
- Click “Register”, “New Account”, “Create Account”, or similar. Fill in your details as requested. At Bitcoin casinos this can often be as little as a username and password.
- If necessary, verify your email address by visiting your inbox. Follow a link in the email the casino should have sent you. You might need to sign in again to your casino account too.
- Click “Deposit” and you should see a Bitcoin public key appear. Copy and paste this (double check that the copied text is the same as that shown by the casino) into the “Send Address” field in your own Bitcoin wallet, enter the number of BTC you want to send.
- Click “Send”.
Your deposit should arrive at some point between the next ten minutes and next hour. Then, the experience of the Bitcoin casino is very much like a regular online casino. The only major difference is that all bet amounts and bonuses will be denominated in BTC, rather than dollars or pounds.
Provably Fair Gaming
Bitcoin is built on a technology known as blockchain. Blockchains are immutable public ledgers – meaning once it has been updated, it is impossible to edit or remove the data. Some casino developers have started to experiment with blockchains to create what’s being called “provably fair” online gambling.
The idea is a little like being able to verify every card in the decks of a game of blackjack. You can see that all the values that should have been entered into the random number generator were in fact entered. This allows the players themselves to audit the games and could well see a big shift in the way licencing agencies work going forward.
Although it’s certainly a fascinating concept, provably fair gambling sounds better on paper than it really is. It’s not like just anyone can audit the game (well they can, but they wouldn’t know what they were looking it). It still requires a reasonably gifted coder to get in to check the validity of a game. The breakthrough thing here is that the coder doesn’t need permission to snoop around at the inner workings of the game. In an industry ever looking to promote fair play it is an encouraging development that we will be keeping an eye on.
Conclusion: Should You Use Bitcoin?
As you can see Bitcoin use at online casinos probably isn’t going to be for everyone. Unless you have some reason why you can’t use another deposit method, exchanging money before playing at an online casino is probably going to seem too much like hard work. For those with great access to banking facilities and who live in fully-regulated markets, using Bitcoin might make little sense.
However, if you’re one of the more than one billion people who don’t have access to a bank but do have access to the internet and a smartphone, Bitcoin could be ideal. Bitcoin can extend online services that require traditional payment networks to those who can’t setup a bank account for whatever reason. It can also be used to access iGaming services by those who might live in an area that prohibits the pastime.
Finally, there are the bonuses. Bitcoin casinos often run frankly enormous welcome bonuses. These relatively new iGaming businesses are desperate for new players and for word of mouth to spread about them. For this reason, they’re frequently very generous with promotions!