If there’s one thing that bookmakers are quick to do then it’s surely move with the times when it comes to the ways that customers can deposit money into their betting accounts. From the early adoption of methods, such as PayPal through to constantly ensuring that newer payment techniques like Apple Pay can be used, they want people to be able to have a flutter in the most convenient ways possible. In part, that’s been aided and abetted by the development of technology, with the move from traditional bookmakers to the world of online betting forcing them to ensure that they’re as up to date with the latest tech as they can be.
One of the most recent developments on that front has been the ever-increasing popularity of digital currencies. They’ve now become so popular that major football clubs like Arsenal are announcing deals with CryptoCurrency companies in a move to help the industry gain a mainstream audience. The complicated nature of working with such CryptoCurrencies means that it’s never likely to become as popular as the likes of PaySafeCards or Neteller. Here I’ll look at the most popular one by far – Bitcoin.
What Is Bitcoin?
Simply put, Bitcoin is a CryptoCurrency that was created online by a person with the alias ‘Satoshi Nakamoto’. People have been trying to create a computer currency ever since the Internet first became globally popular, but they struggled to do so because people regularly committed fraud.
It was only after the idea of a ‘Blockchain’ was invented that the idea began to be taken seriously, because a Blockchain is essentially a ledger that keeps a note of all transactions that have taken place. Bitcoin wasn’t the first CryptoCurrency but, for various reasons, it quickly became the most popular and was soon accepted for transactions with sites like Expedia and Xbox Games.
How Bitcoin Works
You might well have already established that Bitcoin is a complicated thing to get your head around. If you’re not even sure what I’ve been talking about so far then you might want to steer clear of the world of CryptoCurrencies until you get a better understanding of it. If, however, you’re already keen to get started then the first thing you’ll want to do is head to an Exchange, such as Coinbase, Bitstamp or Bitfinex. There you’ll be able to buy Bitcoins for various types of currency and that money will then ‘exist’ in your digital wallet, which is stored on your computer or in the Cloud.
Once you’ve acquired some Bitcoin then you can use it to make transactions with people and businesses. There are numerous advantages to using CryptoCurrencies, including the fact that they’ll be anonymous and that you can make transfers to other people by using an app on you phone or computer. As I’ve already hinted at, though, it’s a complicated affair even if you’re looking at using the most popular of all of them in Bitcoin.
My advice would be that you don’t get involved unless you feel really confident with what you’re doing. This isn’t like PayPal or other payment methods where you can speak to someone to claim your money back if you make a mistake or someone defrauds you. It’s worth bearing in mind that I’ve barely even touched on how difficult it is to use this sort of currency if you’re uninitiated, so forgive me for labouring the point.
Are There Fees to Pay?
There are many, many benefits to using Bitcoin, even if it is a complicated payment method. One of them is that there’s no reason for bookmakers to charge fees for using it, so you’re unlikely to have to do so. The problem is that not many bookmakers are actually using it yet, so there’s no way to know for sure whether some are going to come up with a reason to charge you for Bitcoin transactions. The first British bookmaker to accept it, NetBet, don’t charge any fees at the moment, so there’s no real need for others not to follow suit as they begin to introduce it.
Using Bitcoin with Bookmakers
The beauty of using Bitcoin is that transactions should take a matter of seconds. It’s an almost instant form of moving money around, so if you can get your head around how it works and you don’t like to wait for money to hit your account, then it’s definitely worth considering. There’s still that pesky matter of ‘getting your head around how it works’, however, and that’s far from easy. Here, I’ll try to explain how it works as best I can and as succinctly as I’m able.
1. Creating a Bitcoin Wallet
The first thing you’ll need to do is to create a Bitcoin wallet, which is the CryptoCurrency of a bank account and is what you’ll use to buy and sell the commodity that is Bitcoin. There are loads of them around, so have a look and see if there’s one that takes your fancy.
You’ll need to go through a registration process when you find one, but it’s not complicated and you only need an email address. Just make sure you choose a genuinely strong password, given that you could end up having a lot of money in your wallet and you don’t want to make it easy for someone to defraud you of it.
2. Purchasing Bitcoin
After you’ve clicked the email link to activate your account, you can then link your wallet to your mobile device, presuming you chose one that has an app available. Some wallets might ask you to confirm your identity, but a lot of that depends on the level of security they work at.
I mentioned Bitcoin Exchanges earlier and you can use them to buy the CryptoCurrency, but some of the wallets allow you to buy it from within them without the need to go to an Exchange. Obviously, you’ll need to add your current bank details in order to do that and you’ll normally pay a 3% fee for transactions using credit or debit cards.
3. Depositing Funds with Bitcoin
Once you’ve got your Bitcoins, you’ll be able to use them to deposit funds into your bookmaker account. You’ll have to get your Bitcoin address from your betting account, which you’ll find by going to ‘Deposit Funds’ or similar and selecting your payment method.
Copy the address and head to your wallet, finding the part of the site that allows you to ‘Send/Receive Funds’. You’ll have to enter your bookie’s Bitcoin address in the ‘Recipient’ section and choose how many Bitcoins you want to send them. This should be virtually instant, so head over to your account and make sure the money has arrived.
4. Withdrawing Funds Using Bitcoin
Note: Most bookmakers do not allow you to withdraw using Bitcoin at the time of writing, so you will most likely need to withdraw using standard currency.
Obviously we’re all in this to win money, so once you have, you’ll want to move it from your betting account to your wallet. It will be moved as Bitcoin, so you’ll then have to sell it in exchange for whatever currency you want it in – presuming you don’t want to just use it online with retailers who’ll accept it. You can do this at an Exchange, but often you can do it from within your wallet, with a ‘Buy / Sell’ section normally readily available.
Once you’ve got your regular currency in your wallet, you’ll need to transfer it over to your normal bank account, which is done by a wire transfer or similar. It’s much the same as using PayPal or some other sort of eWallet, with the major difference being the steps you have to take and the fact that they’ll be unusual to you.
What Else Do You Need to Know?
As we mentioned above, most bookmakers won’t let you withdraw in Bitcoin even if they will let you deposit using that currency. In that instance, you might need to accept payment in a normal currency like GBP or USD, but that just skips the section when you have to head to an Exchange or use the ‘Buy / Sell’ function in your eWallet. So, that said, let’s take a look at some of the pros and cons of using Bitcoin in the iGaming world.
Pros of Using Bitcoin
There are many pros of using Bitcoin as a payment method. As I’ve already mentioned, it’s anonymous and secure and you’re far less likely to be defrauded because of those facts. It’s also much quicker than a lot of more traditional payment methods, which is worth bearing in mind if speed is of the utmost importance to you.
Cons of Using Bitcoin
The downsides include the now much talked about complicated nature of the entire process. That’s something that some of you will adapt to quicker than others and may well put you off using it altogether. There’s also the fact that it’s still not a common deposit method for bookmakers, with many taking their time to adapt to using it and the ones that do use it, won’t allow you to withdraw using Bitcoin.
That said, the deal between Arsenal and CashBet will likely begin the journey for CryptoCurrencies to become more common payment methods, so that might change in the near future.
Regardless of whether you’re talking about British Pounds or US Dollars, most money doesn’t actually exist in a physical format. If you think about your own bank account, regardless of how much money’s in it you don’t actually see that money in the real world. You can do a bank transfer from your account to a friend’s and no actual notes or coins change hands. In that sense, Bitcoin and other CryptoCurrencies aren’t all that different from any other type of currency.
Roughly 95% of the money in the world in any currency is digital, whilst with Bitcoin it just so happens that it’s 100%. The biggest difference is that Bitcoin isn’t linked to a government or country, meaning that it can’t be seized by one of them or controlled in any way. Payments are done in a method that’s known as peer-to-peer, or person-to-person and without the need for a middle man or bank to get involved.
Blockchain & Mining
Bitcoins don’t exist in the physical realm, they are made up of cryptographic keys and are bought or sold as any other currency is bought or sold. Transactions are registered courtesy of a Blockchain, which is a group of network nodes. Some people have made a career out of ‘mining’ Bitcoins, which basically involves breaking codes to confirm that the transactions are genuine, as well as other things. It’s what makes the entire system work, with ‘Miners’ needing to break the codes in order to earn Bitcoins of there own.
Sufficed to say, this very much fits into the ‘it’s complicated’ category that I’ve mentioned in the past. It’s the comparison of your desired transaction against the Blockchain, which is the public ledger of transactions, that confirms that it’s real and your funds can be moved around accordingly.
The Rise of Bitcoin
All of this came about in the wake of Satoshi Nakamoto research paper, which was released in 2008 and confirmed that peer-to-peer payment systems could work. The first ever transaction of Bitcoin happened in 2009 when Nakamoto transferred a programmer called Hal Finney 10BTCs. Nakamoto later left the project, but that didn’t stop it going on to become a global phenomenon.
In 2014, Bitcoin sponsored the Super Bowl, whilst the following year, Barclays decided to accept it as a form of deposit and became the first UK bank to do so. There was some bad press around it as a payment method to begin with, but that was mostly due to people either not understanding the system or governments who were concerned about losing control of the currency that they used or not being able to claim tax on it as a form of money.
First Bookie to Accept Bitcoin
NetBet began accepting the currency for online payments in 2016 and they were the first British bookmaker to do as much. The market has been volatile ever since it was first created, with movements in value happening on an hourly if not daily basis. Anyone who is involved in the financial market would be quick to tell you that you’d be silly to have any savings put into Bitcoin. Instead, you’ll want to change money into the currency as and when you need it, even it is has settled and become more predictable in recent times.
The fact that it will never be tied to a country or economy has many benefits, but the volatility of the market is definitely a downside. A Bitcoin could be worth £100 one day and then £10 the next, so waiting until it’s on the up before selling it would be a wise thing to do.