You have been playing at online Casinos for years and have all the confidence of a well-educated player. Knowledgeable in all areas keeping up with the latest game releases, newly launched Casinos and the best promotional offers. Right when you are feeling on top of your game Bitcoin comes along and it’s like a brand new playing field. First thought is it seems complicated and instead of expanding your horizons you decide to stick to your usual standard banking routine. But with Bitcoin Casinos on the rise and 2015 here, they are difficult to ignore and avoid. The history of bitcoin was a payment system open source software invented by Satoshi Nakamoto in 2009.
The system verifies transactions through a block chain in a ledger where all bitcoin transactions are distributed publically. That means there is no administrator or a central depository, therefore considered as a digital or cryptocurrency. Block chain independently verifies the ownership amount and about 6 times per hour a group of transactions are added to the chain and published.
Only one specific address can be used to spend bitcoins. The payer is required to digitally sign the transaction using the corresponding private key. The private key is the privilege and knowledge of only one user where the signature is verified by the network. In the event the public key is lost the network has no means to recognize or verify the ownership and unfortunately the coins are lost and cannot be replenished. In one instant a bitcoin user lost 7,500 bitcoins valued at $7.5 million in 2013 after removing the hard drive that stored the private key information.
Mining is a commonly used term that translates to record keeping system. It is the “Miners” that verify and collect new transactions placing them in new groups called a block. This new block connects information from the previous block and creates the block chain name. After the new block is completed it must go through a process referred to as proof-of-work. The process involves the nonce (number used once) and the difficulty target requiring an immense amount of work. Modifying the chain of blocks would be extremely difficult with proof-of-work system to hack considering all subsequent blocks would have to be modified. As new blocks are mined it increases the higher number of blocks.
Bitcoins are recognized in the retail world including stores, cafes and in the gambling industry. One of the main advantages for bitcoin users is anonymity. All online casino transactions are done in complete obscurity. Most bitcoin Casinos do not charge transaction fees or impose limits on the number of transactions. Accessibility on a global market reaches players world-wide. Since there is a level of difficulty in traditional currency due to legal restraints, bitcoins has become a popular alternative.
In the traditional sense of online casino transactions tracking play and identification of the players are readily available. Because bitcoin transactions are digital and cryptocurrency it becomes near impossible to audit or perform verification. As a result these casinos require little client details such as email or login name only without verifying legal gambling age or regional location of player.
Preventive measures are implemented to protect the bitcoin network. The private key cryptography guards against unauthorized/double spending, forging and manipulating block chain.
Once a bitcoin is sent to another user it then becomes the recipient’s property. Unauthorized spending is when sender observing the transaction may be tempted to spend the bitcoin. It will soon be discovered that signing the transaction without knowing the recipient’s private key is impossible.
Double spending is when a user pays the same coin to more than one recipient. In this instance the network protects against double-spending tactics by recording all transfers in the block chain ledger. This ledger is visible to all users confirming the transfer bitcoin has not been spent.
It is also very important to wait for a payment sent to be included in the block chain to guard against what is referred to as the Race Attack. This takes place when a user signs a transaction to one party while creating a new transaction with a different party with the same bitcoin. The network will by default will accept one of the transactions. A variant of this is the Finney Attack where a miner intercepts a payment to one person by mining a block to another. The rogue miner can succeed before the network does resulting in a rejected payment to the intended person. This can be greatly reduced by waiting for the block chain to include the payment.
The digital currency concept established in 2009 and has since that time shown a steady increase in the number of users. The unregulated bitcoin currency allows people to send payments over the internet, track and store. As it continues to spread on global level, although small now has potential to become of the largest forms of financial technology in history. Advancements are already in the works including Bitcoin 2. This technology encrypts transfers of important documents like real estate, business contracts and passports.
According to Duke University professor Campbell Harvey who plans on offering a course in crypto finance this year:
"Bitcoin is probably the most secure form of transaction in the history of the world."
"While it is minuscule today, that does not mean it will be small in the future," Harvey says. Adding that education is key.
References:
Shobhit Seth (October 2014). “How Bitcoin Casinos Work” Investopedia.
Laura Baverman (September 2014). “Bitcoin's future depends on public acceptance” USA Today.