Bitcoin is simply a cryptocurrency, or a virtual currency that is not directly controlled by the national governments or central banking authorities, but rather by a decentralized network of users. Although many cryptocurrencies are in existence today, Bitcoin is by far the most widely used.
The history of Bitcoin dates back to the year 2008 when the bitcoin.org domain was registered by a person whose identity is still not public information. A person using the name Satoshi Nakamoto announced on the Cryptography Mailing list that he had been working on a new, purely electronic and peer-to-peer cash system that did not involve a third party. Since then, Bitcoin evolved through various phases to become the world’s most popular cryptocurrency.
How Does Bitcoin Work?
You can now comfortably transact bitcoins with vendors who accept it as a form of payment. To facilitate Bitcoin-to-Bitcoin transactions, heavily encrypted and anonymous hash codes are digitally exchanged across peer-to-peer (P2P) network. The transference of Bitcoins between users is verified and monitored by the P2P network. A program known as a digital wallet helps to store each user’s Bitcoins, hold the addresses of the Bitcoins’ receivers and senders, and store a private key known only to the user.
The design of the Bitcoin network is such that it cannot mathematically generate more than 21 million Bitcoins, and can regulate itself to take care of inflation. Bitcoins can be spent simply by requesting for a transfer from an address in the client’s wallet to an address in the wallet of the vendor.
In USA, the controversial use of Bitcoins to anonymously transfer illegal funds or hide undocumented incomes by revenue authorities has seen Bitcoin policy now requiring an identity to be attached to the transactions that involve government-backed, traditional currencies.
What Is Bitcoin Backed By?
Wondering what backs Bitcoin? The answer is nothing at all, but that should not worry you as it is not a bad thing. Like most currencies in today’s world, Bitcoin is a fiat currency, meaning it is a free-floating currency that is not tied to gold or any other precious commodity. However, unlike traditional fiat currencies, bitcoin value has increased since Bitcoin mining through computers is expensive as it requires much time and money. Additionally, since Bitcoin is a free and independent currency, it cannot be subjected to the whims of the government officials. There has been a decrease in the supply of new Bitcoins in the market as their supply is tightly regulated to control inflation.
Advantages of Using Bitcoins
- User anonymity
Bitcoins allow you to make discrete purchases, meaning the transactions cannot be associated with your personal identity. Thus, the purchases cannot be traced back to you, unless you voluntarily publish them.
- Eliminate third party interruptions
With Bitcoins, you can now experience freedom from interruption by banks and governments since the system is fully peer-to-peer. You can transact comfortably without worrying about freezes on your Bitcoin accounts.
- Purchases are untaxed
Since governments parties cannot identify, track or intercept your Bitcoins transactions, sales taxes cannot be added onto your purchases.
- Very low transaction charges
The absence of government involvement and intermediary institutions eliminates those exchange costs and fees that are typically experienced in traditional foreign purchases and wire transfers.
- Quick transfer of payments
Since you do not have to wade through the typical requirements of the third parties, transactions in bitcoins happen very quickly.
- Mobile transactions
You can transact with Bitcoins from the comfort of your home or on-the-go via your mobile phone so long as you have good internet coverage. Gone are the days when you had to travel and queue in the banks or stores to purchase goods and services.
Bitcoin for Gambling
Given the great advantages of Bitcoin over the traditional currencies, Bitcoin has found real use in the online gambling industry, since it offers privacy-centric gambling and a quick way of funding betting accounts, rewarding players, and paying jackpots. Therefore, since the currency’s inception, the use of Bitcoin for gambling has been steadily rising, with many players betting using the cryptocurrency daily.
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Although you may part with a nominal processing fee for gambling with Bitcoin, the fee is far smaller than the charges that major credit card companies demand. Additionally, Bitcoin gambling is safe since there are no chargebacks, and the high speed of processing payments makes it even safer and better than the regular government-issued currencies. With the absence of incriminating paper trails, you can now enjoy privacy and security in your gambling experience.
We therefore conclude that the use of Bitcoins for gambling allows you to have an enjoyable gambling experience without worrying about government requirements and lengthy banking processes. Online gambling transactions have never been this quick, simple and user-friendly.