Bitcoin Guide

Bitcoin Guide – What Is Bitcoin, and How Does It Work?

Bitcoin is a digital currency that is widely used on the Internet by people from all over the world. People can use it to trade with various currencies, shop online as well as gamble at various sportsbooks and online casinos.

Digital currencies are on the rise nowadays and their popularity is fueled by various factors. The reason why many people use it is because Bitcoins are anonymous, they are decentralized and they are convenient and cheap.

However, before you decide to use Bitcoins for shopping or betting, you should familiarize with Bitcoins and how they work. You should also know why it is beneficial to use Bitcoins as well as how to do Bitcoin transactions. Therefore, continue reading to find out more.

What is Bitcoin?

Here is a video that explains bitcoin in just over 1.30 minutes:

As cryptocurrency, Bitcoin is created and held electronically. In addition, there is no central bank or authority that controls it. Compared to dollars or Euros, Bitcoins are not printed and don’t exist in physical form. Instead, they are ‘mined’. They are created by a lot of people running computers throughout the world using software designed to solve mathematical problems.

Bitcoin was proposed by a software developer, or group of developers under the pseudonym Satoshi Nakamoto, an electronic payment system that is based on based on what is called the proof of work algorithm. The idea behind the creation of Bitcoin is to create a currency that is run independently and is not controlled by a central authority.

How Does It Work?

To be able to use Bitcoins, you need Bitcoin wallet. These wallets are either cloud based or software based. In other words, they allow you to store Bticoins online or on your computer. Popular Bitcoin wallets are Blockchain, Coinbase, Armory, Bitcoin Core, Multibit and Xapo.

Afterwards, you need to get hold of Bitcoins. One way to do this is by buying Bitcoins directly via a safe and trusted Bitcoin exchange. You can also find people willng to sell you Bitcoins directly or you can find local and secure exchanges. After you get Bitcoins, you can spend them online and various websites that accept Bitcoins.

Why Use Bitcoins?

There are a couple of good reasons why you should use Bitcoins:

  • Bitcoin is private. Bitcoin addresses aren’t linked to personally ID information.
  • It is decentralized. Banks don’t control it.
  • Bitcoin transactions are fast, secure, cheap and close to anonymous. No personal and banking details are needed, there are virtually no fees and transactions are secure as well as processed pretty fast.
  • They don’t have chargebacks. Once the transaction has taken place, they can be refunded by the recipient.

Bitcoin Transactions

Let’s consider an example of making Bitcoin transactions to and from Bitcoin sportsbetting sites. To make a deposit, you need to sign up with a sportsbook that uses Bitcoins and then head over to the Deposit section.

To fund, your sportsbook account, you need to enter the amount of Bitcoins you want to transfer and the Bitcoin address you want to send Bitcoins to. Then you can use the Bitcoins for NFL betting or for placing bets on other sports. To withdraw Bitcoins, enter the Bitcoin address and the Bitcoin amount.

Are Bitcoins Legal?

The legality of Bitcoins has been put under question by many people and regulators mainly because the currency is decentralized and cannot be controlled. There are also fears that Bitcoin will become monopolized by a user or users that will direct the Bitcoin market. But the truth is, how legal your Bitcoin activates are, depends on who you are and what you are doing with them. In simple terms: Owning, buying and selling bitcoins is completely legal.

Since it cannot be regulated and centralized like the other currencies, the FBI published a document in 2012 pointing out the fears and concerns about using Bitcoins. One of it is the fear that Bitcoins will become heaven for gangs and criminals that will use them to conduct illegal transactions without the knowledge of the law enforcement.

An example of illegal use of Bitcoins is the activities of Silk Road. They allowed user to buy and sell illegal goods using Bitcoins in complete anonymity. Fortunately, Silk Road was shut down, and the people behind it prosecuted.

Bitcoins are, as previously stated completely legal to own and use, but as a precaution we recommend checking with your local jurisdiction before you start using them for gambling purposes.