Chinese bitcoin exchanges resume withdrawals
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Part currency, part investment vehicle, Bitcoin is the latest tech trend to move beyond niche status and into the mainstream.
Financial experts everywhere are debating the merits of cryptocurrencies like Bitcoin, while eager users continue to buy it, sell it, and spend it. But while the rest of the world is finally waking up and taking notice, the online poker community has long recognized the power and potential of Bitcoin.
With anonymous exchanges between customer and provider, zero third-party oversight from banks and financial institutions, nearly instantaneous transactions, and the removal of fees tacked on to deposits, Bitcoin has transformed how online poker is played. From there, my hope is that readers enjoy the same experience I did, meaning no hassles from banks blocking transactions, no fees tacked onto deposits, and most importantly, the excitement that comes with hopping aboard the Bitcoin bandwagon.
Before embarking on your Bitcoin journey, you should take some time to research exactly what cryptocurrency really is. The purpose of this white paper was to provide a proof, in mathematical terms, of an idea put forth ten years earlier by computer engineer Wei Dai. As envisioned by Dai, the age-old art of cryptography — or encoding messages — could be used as the basis for a new form of currency and commerce.
In the white paper, now spoken of in reverential tones by Bitcoin adherents, Nakamoto outlined his vision for a decentralized system of currency designed for the digital age. In the physical world, people are free to engage in commerce directly by exchanging cash with one another. Without diving too deep into the technical jargon, a Bitcoin is simply the byproduct of encoded transactions posted to the blockchain.
A decrypted line of code is added to the blockchain — the running, anonymous ledger of every Bitcoin transaction ever conducted — approximately six times each hour. And for each block of transactions that a miner decodes and confirms, a miniscule amount of additional Bitcoin is created and added to the economy. All told, the blockchain is capable of producing 21 million Bitcoin before that finite supply is exhausted.
Only 21 million Bitcoin can possibly be produced, creating a limited supply that ensures users have incentive to buy and sell.
Initially, a single Bitcoin was valued in cents, and then dollars, before an explosive increase in value over the last year. The fate of Bitcoin remains unclear, as Nakamoto never intended his creation to serve as a speculative investment. The entire purpose of Bitcoin and other cryptocurrencies is to make online commerce easy, efficient, and anonymous — not to generate profits measured in the very fiat currency Nakamoto hoped to replace.
Players exchange their fiat currency for Bitcoin, use it to bypass intrusion from banks and other third parties, and shield their identity from prying eyes. The easiest way to convert your fiat currency into Bitcoin is through a cryptocurrency exchange. Sites like Coinbase, Poloniex, and Bitstamp are among the most popular exchanges out there today, and they strive to make the process as simple and straightforward as possible.
As the name suggests, an exchange is nothing more than a platform for people to buy and sell Bitcoin. Once a match is made, your dollars are sent to the seller in exchange for their equivalent value in Bitcoin. Think of a Bitcoin wallet as just another digital representation of your financial reserves. The list below highlights several of the most commonly used Bitcoin wallets:.
This step is probably the easiest of the bunch, because so many online poker rooms are clamoring to add Bitcoin capability. Ever since the US government authorized the Unlawful Internet Gambling Enforcement Act UIGEA of , which banned companies from conducting online gambling-related business, poker sites and players alike have struggled to escape the long arm of the law.
For a while there, it became quite difficult to conduct online poker transactions using traditional means. Players were forced to purchase gift cards or use services like Neteller to bypass the prying eyes of banks and financial institutions. With the advent of Bitcoin, online poker rooms finally had a way to conduct deposits and withdrawals without the banks getting in the way.
These transactions are guaranteed to go through, and even better, the lack of bank involvement means no fees charged to pay off the middleman. With now upon us, almost every major online poker platform has added Bitcoin functionality. After registering your online poker account, head for the Cashier or Banking section of the site to initiate a deposit. Next, the site will provide you with a one-time-use private key that provides access to its own virtual wallet.
Sender, Recipient, and Amount. From there, the entire transaction is encoded once more, before a Bitcoin miner working somewhere in the world decodes the text and adds the newly confirmed transaction to the blockchain. For longtime online poker players, this step of the process once proved to be the most difficult. When you initiate a withdrawal request using Bitcoin, the process is just as quick and easy as it was when you first deposited. Just head back to the Cashier or Banking page, locate the Bitcoin tab, and click through to the same dropdown menus you used before.
The site already recognizes itself as the Sender, so it will provide its virtual wallet private key to complete the transaction. Once again, a miner toiling on a supercomputer somewhere will decode and confirm the transaction and add it to the blockchain.
And within the span of mere hours, the price can jump or shrink by a few thousand bucks at a time. But what if the price of Bitcoin changed between the date you deposited and the date of your withdrawal? While fiat currency does have decided drawbacks, one of its main benefits is stability.
Aside from the slow scourge of inflation, one dollar is worth one dollar, whether you spend it today, tomorrow, or a year from now. For this reason, online poker players who use Bitcoin for banking purposes should always be mindful of the exchange value. But for every eBay or Amazon, hundreds of sites crashed and burned, creating one of the more infamous bubbles in memory.
More recently, the resurgent housing market of the mids created an artificial bubble, sparking a foreclosure crisis and the Great Recession. I tell you this not as a word of warning against using Bitcoin for online poker. With that said, the investment market that has sprung up so rapidly around Bitcoin does leave me concerned about the looming threat of a bubble.
As with any new technology, and financial vehicle for that matter, do your due diligence and put in the research before putting all of your eggs in the Bitcoin basket. This step-by-step guide to playing poker with Bitcoin offers a complete education in using the most popular virtual currency to play poker online. Once you learn the benefits of using Bitcoin and how easy it is, you might never go back to using regular currency to play. Step 1 — Take a Crash Course in Cryptocurrency Before embarking on your Bitcoin journey, you should take some time to research exactly what cryptocurrency really is.