What is Bitcoin?
Bitcoin is an open sourced peer to peer payment system, a digital currency, which is not controlled by any bank or a single entity. The bitcoin creation process, which is called mining is done by a network of computers which are pretty much auditing the ledger of previous transactions made with bitcoins. The open protocol of bitcoin dictates that the coin is deflationary; there is a known number of bitcoins that will ever be produced, and the pace of producing it becomes harder with time.
Bitcoin can be instantly divided up to 8 decimal points after the 0, and can just as easily be combined. One can send it anywhere through mobile phone or any form of network connected device with minimal to no fees.
Bitcoin’s security is unbreakable. There are no double spending or chargebacks.
Overall, Bitcoin can represent a great solution to existing illness of the current economic system, such as inflation, printing money, non-controllable debt/GDP ratios, fraud, over leverage and more.
And those are only the known features of the protocol, which has some surprising infrastructure that allows the following (few examples)
- Bitcoin can be used to sign regular and conditional contracts.
- Bitcoin technology allows escrow services.
- Bitcoin fractions can be used as deeds of property and proof of ownership (Colored Coin project).
- Bitcoin provides (and essentially built upon) publicly audit-able ledger of transaction, contracts, ownership and more.
- Bitcoin is immune from attacks
- Bitcoin eliminates double spending and chargebacks.
- Bitcoin eliminates labor in transactions, accounting, lending, IPOs and much more….
To summarize – Bitcoin can completely change the financial, legal and other sectors and can completely change our economy as we know it.
With these possibilities in hand more and more analysts predict a value of even 500,000 USD and more to Bitcoin in the foreseeable future.
Bitcoin is not alone in the CryptoCurrency scene, there are about 100 alternative currencies existing (AltCoins) mostly established on the same protocol of Bitcoin with manipulated parameters. None of which has reached the success and acceptance of Bitcoin and all coins together represent less than 10% of the entire CryptoCurrency eco system. However, some are more popular than others and could be seen as a cheaper alternative solution to Bitcoin. The second popular digital coin is Litecoin and a few other popular alternatives are Dogecoin, Namecoin, Feathercoin, Primecoin and more.
What can affect the value of Bitcoin?
The Bitcoin as a relatively new technology (exists for 4 years) is an extremely volatile instrument and is affected by various events. For example:
- Economy/global crisis – such as the Cyprus bail in event in 2003, global economic crisis, wars and FIAT currency changes.
- Regulations worldwide, especially in USA, China and Europe.
- Acceptance and adoption rate by consumers and businesses.
- Supporting technology which allows using it by the average population, like tools that allows ease of purchase.
- Existing financial giants, banks, hedge funds and governments that disclose investments in Bitcoin, like Fortress which disclosed a paper loss on bitcoin in its report, which revealed it bought bitcoins.
What will the bitcoin value be if: (scenarios, source: T.D – San Jose Bitcoin Conference 2013)
- Hedge funds will allocate 1% of their capital towards Bitcoin – 1,250 USD/BTC
- Argentines change greenbacks for BTC – 2,500 USD/BTC
- Gold owners sell 1% for BTC – 3,500 USD/BTC
- Shadow economy uses BTC – 175,000 USD/BTC
- BTC becomes the new gold – 350,000 USD/BTC
- BTC becomes the world’s reserve currency – over 500,000 USD/BTC
Bitcoin is viewed differently across different countries and sometimes even between different bodies of the same countries. Overall the USA as Europe, Australia, Brazil, Argentina, South Africa and other countries are considered permissive when it comes to Bitcoin, while China, Russia and India are contentious towards it. In between there are a few countries with unknown or yet to be determined approach towards Bitcoin such as some countries in South America, most of African nations, some Arab countries and parts of eastern Europe. Very few countries are hostile towards Bitcoin such as Vietnam.
More specific, updated info can be found at: Bitlegal.net
Bitcoin is being saved more than it’s being spent. However, transactions are made and the amount of transactions increases by the day. Common estimates attribute about half of Bitcoin transactions to online gambling.
The first generation for gambling with Bitcoin. It offered anonymous, no-registration-required way to gamble from anywhere on provably fair range bets. It has a very simple interface and almost no graphics. . The field has evolved much since then and full featured online casinos came out like mushrooms after the rain, providing rich-graphics, large variety of popular traditional and non-traditional games and pretty much the same features as real money online casinos. The next phase started when software providers started building specific software for Bitcoin gambling and selling white labels. Playfors is among the leading providers of Bitcoin related online gambling platforms.
Bitcoin’s advantages towards online gambling
Bitcoin as it is now, provides major advantages to online gamblers and to online gambling firms.
- First and foremost the online gambling industry with real money (FIAT currency) is saturated and crowded, the competition increased costs of operation and player acquisition dramatically and sometimes made it unprofitable to operate online casino.
- The regulation in the real money gambling industry has increased to a level where most operators are losing money or enjoying marginal profits in some territories, where other territories are simply forbidden to gamble at. Even in allowed territories, online gambling companies are required to obtain gambling license and pay the local government huge fees and taxes.
- The Bitcoin online gambling industry on the other hand has much less competition, reduced costs of operation and player acquisition. In addition the status of regulation is unclear and shall remain so for the coming years as the status of Bitcoin is unclear. This makes it possible for Bitcoin operators to work in a grey area and accept players from the USA which is impossible with FIAT currency.
- The Bitcoin infrastructure prevents charge backs and double spending which eliminates a huge chunk of online gambling fraud and thus reduce costs and keeps profits in-house.
- The Bitcoin allows anonymity for players who wish to remain anonymous. Registration to Bitcoin gambling websites is quick, easy and requires minimal details as opposed to online gambling with real money.
- The Bitcoin infrastructure allows ‘provably-fair’ mechanisms, which means that the players can check independently that the results generated by the random number generator are legit and not tampered with. While most online casinos working with real money are actually legit and use 3rd party seals for their random generators, it is impossible for players to actually prove it.
From the player’s point of view the reduced costs of the operator allows him to get better odds and chances of win from the operator, some operators actually offer better chances than real money operators.
Playfors and Bitcoin
Coming from the online gambling industry, Playfors team developed more products besides the games: admin panel which provides real-time reports and bonus management for the skins and in addition to that an affiliate system that allows operators to bring casino traffic to their brands with ease. Those, combined with the fact that the games are all HTML 5 and fits mobile devices as well as desktop and laptops represent the best one-stop-shop possibility for online casino operators that want to focus on Bitcoin and crypto currency.
Playfors also developed Bitcoin and crypto currency processing for online businesses that wish to accept Bitcoin and also an exchange technology that allows individuals to exchange FIAT currency with crypto currency and vise versa.