In 2008, a programmer known as Satoshi Nakamoto—a name believed to be an alias—posted a paper outlining Bitcoin’s design to a encrypted e-mail list. Then, in early 2009, he released software that can be used to exchange bitcoins using the same scheme. That software is now maintained by a volunteer open-source community, coordinated by core developers.
Nakamoto wanted people to be able to exchange money electronically and securely, without the need for a third party, like a bank or a company like PayPal or Skrill. He based Bitcoin on cryptographic techniques that allow you to be sure the money you receive is genuine, even if you don’t trust the sender.
If you are interested in Bitcoin, there are many e-wallets you can choose from, including the likes of Blockchain, Paxful, or Copay.
How to Use Bitcoin
When using Bitcoin you have two choices. First, to use an e-wallet where you don’t have to download anything. You just log in, confirm your personal information and choose whether your safety will be ensured by the company, or if the keys will be in your custody.
Your second choice is to download and run the Bitcoin client software. I t connects over the Internet to the decentralized network of all Bitcoin users and generates a pair of unique, mathematically linked keys, which you’ll need to exchange bitcoins with any other client.
One key is private and kept hidden on your computer. The other is public, and a version of it dubbed a Bitcoin ‘address’ is given to other people so they can send you bitcoins. Crucially, it is practically impossible—even with the most powerful supercomputer—to work out someone’s private key from their public key. This prevents anyone from impersonating you. Your public and private keys are stored in a file that can be transferred to another computer, for example if you upgrade.
A Bitcoin address looks something like this: 15VjRaDX9zpbA8LVnbrCAFzrVzN7ixHNsC. Casinos that accept bitcoins provide you with their address so you can use it easily.
In February 2015, the number of merchants accepting Bitcoin for products and services passed 100,000. Instead of the 2–3% fee typically imposed by credit card processors, merchants accepting Bitcoins often pay fees in the range of 0% to less than 2%.
When you complete a transaction, your Bitcoin software performs a mathematical operation to combine the other party’s public key and your own private key with the amount of bitcoins you want to transfer. The result of that operation is then sent out across the distributed Bitcoin network so the transaction can be verified by Bitcoin software clients not involved in the transfer.
Those clients make two checks on a transaction. One uses the public key to confirm that the true owner of the pair sent the money, by exploiting the mathematical relationship between a person’s public and private keys; the second refers to a public transaction log stored on the computer of every Bitcoin user to confirm that the person has the bitcoins to spend.
When a client verifies a transaction, it forwards the details to others in the network to check for themselves. In this way, a transaction quickly reaches and is verified by every Bitcoin client online . Some of those clients - “miners” - also try to add the new transfer to the public transaction log, by racing to solve a cryptographic puzzle. Once one of them wins the updated log is passed throughout the Bitcoin network. When your software receives the updated log it knows your payment was successful.
Benefits and Limitations
The nature of the mathematics ensures that it is computationally easy to verify a transaction, but practically impossible to generate fake transactions and spend Bitcoins you don’t own. The existence of a public log of all transactions also provides a deterrent to money laundering, because you’re looking at a global public transaction register. You can trace the history of every single Bitcoin through that log, from its creation through every transaction.
There were not a lot of casinos using Bitcoin in the past. Nowadays, Bitcoin enthusiasts have made it possible to play with Bitcoin at many casinos, like the popular Bit Starz casino. You can find our review of BitStarz on our website, , as well as a complete list of casinos accepting Bitcoin.