Bitcoins are the world’s most popular crypto or digital currency. They don’t actually exist, like paper money and coins. You can’t hold them in your hands. So what are they really? Why have they emerged from the geeky world of cryptopunks and the dark corners of the internet to be a main stream currency allowing you to buy everything from coffee, beer and subway sandwiches to real estate, cars and yachts, to pay for air tickets online, taxi rides, play in online bitcoin casinos and buy Powerball lottery tickets in New York? Let’s find out…

Cash. Credit. Debit. Even PayPal.

All of the above are forms of payment accepted when you’re gambling, with the latter three being accepted at the majority of major real money online casinos. But, what about a form of payment that isn’t linked to a bank account? Or any personal information at all?

That, my dear reader, is where bitcoins come in.

The use of bitcoins in online gambling is growing, with bitcoin casinos popping up everywhere and I’m here to tell you everything you need to know about this electronic currency – the good, the bad, and the rest of the details so you can calculate the risk.

So, what are bitcoins?

I’m glad you asked. Bitcoins are a form of digital currency – also known as “cryptocurrency” – created by a guy named Satoshi Nakamoto back in 2009. They’re purely electronic, so no bitcoins will ever be minted, and you won’t find them sitting in your wallet in your back pocket. No sir, all the bitcoins you ever own will be stored on a computer in a digital wallet, to be used for purchases made online.

The Pros and Cons of cryptocurrency

What’s so great about bitcoins?

Another fantastic question! Let me break down the pros of this electronic currency:

  • Decentralized

That’s just a fancy word to say that bitcoin is the only form of currency that is not controlled by anyone. And most importantly, it means that whatever bitcoin you own is yours. The big banks don’t control it, and you aren’t charged fees for using your money. Plus, you can use it anywhere in the world – there’s no worrying about exchange fees or whether your money will be accepted depending on the location.

  • AnonymousBitcoin's growing popularity in online gambling

Bitcoin addresses aren’t linked to your personal name, address, or any other private or damning information. For this reason, bitcoin is very popular for buying illegal products and services – the currency has been used to buy anything from drugs to hired hitmen. While I do NOT recommend purchasing these or other unsavory items, bitcoin is excellent for keeping you and your personal information under wraps. No one will ever know your obsession with Star Trek memorabilia unless you want them to.

  • Online

Ah, the wonders of the World Wide Web. Since bitcoins are solely electronic, they are exceptionally easy to use and ridiculously fast. Money can be sent and received almost instantaneously, to and from anywhere in the world. A bitcoin account is easy to set-up and begin using, so you could be spending (and receiving) coins in a matter of minutes.

To sum, using bitcoins is fast, easy, anonymous, and no one controls your money but you. Pretty sweet, right?

Sounds cool. But what’s the catch?

Unfortunately, like all other currency, bitcoins do have their drawbacks. The most notable cons include:

  • Limited use

You can only use bitcoins online. If you want to use your bitcoins in most physical businesses, you need to exchange them for physical currency first. So, while they’re great for online use, you still can’t go into H&M and buy those jeans with bitcoins without turning them into real coins first. But you can buy physical products online using bitcoins – it just depends on what is convenient. To turn Bitcoins into real money you have to sell them at a Bitcoin exchange, then withdraw the money from your bank account.

  • System transparency

While you and your personal information are anonymous, your transactions using bitcoins are not. Every single transaction made by anyone using bitcoins is recorded and stored in giant ledgers made by miners called blockchains. And if you have a public bitcoin address, anyone with a bitcoin account can see how much value your address possesses. Granted, no one really knows anything about you, but they can know pretty much everything about your bitcoin address. Makes you second-guess buying those illegal products, doesn’t it?

  • Insurance

This is the biggest drawback of bitcoins. Since this form of currency is decentralized, there is no insurance. So, bad news: if you lose your bitcoins, there is no way to replace them. This means that if your digital wallet is lost, a virus corrupts the data, or someone hacks into your information and steals what is rightfully yours, there is no way to recover the money that you’ve lost. For example, take James Howells. In 2013, during a spring-cleaning, he threw away a hard-drive that, at the time, held over $9 million in bitcoins. And, because it’s a decentralized, electronic currency, it was gone – destined to rot forever in a landfill in the United Kingdom. Anyone want to go dumpster diving?

So while you do get to enjoy (some) anonymity, complete control over your coins, and ease of use, the drawbacks are pretty serious.

In addition, the value of bitcoins fluctuates heavily. Bare with me, as I throw some numbers at you – as of January 4, 2017, one bitcoin was valued at $1,127.48. Less than a week later on January 10, 2017, that same bitcoin was valued at $903.99 – that’s a decrease of $223.49, or 19.8% in just six days.

So, what about gambling with bitcoins?

Do online casinos accept bitcoins

Now we get to the good stuff. The use of bitcoins in gambling is growing, not only because it’s fast and easy to use, but also because it allows players to gamble in online casinos legally in countries like the United States, where gambling laws are strict and vary by state. Currently, there are laws preventing individuals from processing payments from online gambling using US banks. However, since bitcoins are decentralized and not controlled by any American banks, players using the cryptocurrency can collect payments in bitcoins with no worries.

However, online bitcoin casinos still face obstacles. Security is still a big issue, and if a bitcoin casino is hacked, your account password – and your coins – could be stolen. And since the coins aren’t insured, you can bet that if your money is stolen, you won’t get any of it back.

Overall, that’s a risk you have to decide whether bitcoins are a risk worth taking.

Well, how do I get my hands on some coins?

You can purchase bitcoins from an exchange or an individual, or you can join the network of individuals known as “miners” who discover bitcoins. That’s if you like math and computer code, of course. So if you like a reasonable degree to anonymity, fast payment and can make sure you don’t lose your wallet, maybe Bitcoin is the way to go. Buy yourself some Bitcoins and get started with Bitcoin Gambling at Planet 7 Casino today.

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Nick Johnson is a lover of game theory and mathematics. After years as a quant on Wall Street, Nick stepped out of the fast lane to become a stay at home dad and write. After chasing the kids around all day and tucking his little ones in bed, Nick loves to relax playing in online Casinos and is a life-long poker enthusiast.