Bitcoin is a virtual currency that was created in 2009 by a person named Satoshi Nakanoto, a mysterious or nonexistent person or group of people. The whole concept of Bitcoin has been discussed for many years but the actual evolvement of the true virtual currency that is traded and used for purchasing merchandise and services only came into fruition in 2009. The idea of Bitcoin is that it bypasses all banks and clearing houses and is maintained by a core group of developers that use specialised mining software to extract each coin.
Initially, the mining of each coin could be carried out on a personal computer but today, a complex system of computers and hard drives is needed to mine Bitcoins with special algorithms. These coins are then kept in a virtual wallet where owners can use them for trading and also exchange for real currency.
The advantages of this system are clear to anyone that uses them, there are no additional fees, and a maximum of 1% may be added as a service charge versus the 3% for credit cards and varying monthly fees for banks. The trading of these coins is instant and the owner has full control over his own coins through the unique code and complex algorithm that each coin is assigned.
At present Bitcoins are being produced at a rate of 25 coins per 10 minutes but there is a cap of only 21 million and the rate of production is programmed to slow down making it hard for the Bitcoins to be produced and therefore their value will automatically go up, unless there is a way to break the system and produce more at a faster rate. This, the developers believe is also a way to keep inflation down. At present, the system of mining used to produce the Bitcoins is state of the art with the highest encryption possible, on a level with government and top security agencies. It seems that everything has been thought about in relation to the Bitcoins making them more or less invincible.
The Negative Aspects of Bitcoin
But for many the Bitcoins are problematic. Their value is fluctuating like mad with the lowest rate when they were first created being $0.06 and their highest traded value noted as $5000. This is even higher than the fluctuations of gold and something that is very hard to monitor but for those that own Bitcoins, there are no complaints. There are also some very negative connotations associated with Bitcoins as a result of them being used for trading online with the Silk Road, a drugs company that was later closed down by the US authorities. Also in China, the Mt. Gox trading company lost millions as a result of hacking and dirty dealing of the Bitcoins.
Other disadvantages of this system include the fact that only 7 transactions per second can be carried out with Bitcoins leading to a lower output for users or a backlog that can clog systems and if talking about online gaming and especially mobile casinos, this can cause major frustration for players who want to play in real time and immediately. No one really owns the Bitcoins, it is an open system and therefore, as has been proven in the past is also open to hacking and hijacking. The technology will soon outdate the rising demand for Bitcoins.
Bitcoin Positive Feedback
Having looked at the development of the Bitcoins and the disadvantages that it causes there are also many positive aspects to the Bitcoin system that could work for online pokies Australia and especially the mobile casinos. The Australian online pokies will benefit from adopting Bitcoin as a payment method only if they keep it under strict and careful guidelines.
It must be noted that payment by Bitcoin offers a very secure option that is instant and has no associated fees with it. The value of the Bitcoin is fluctuating thus making it hard for a player to properly pinpoint the amount that he will use at the casino but on the day that he trades his Bitcoin at the casino, the value will be taken for that day.
To date, there are over 35000 merchants online that are using Bitcoin for trading and a fair number of companies that do not trade online who are also using this method of payment. One well known Australian company, Tomcar has been using Bitcoin for some time to pay its suppliers adding on a 1% fee for the service. The company CEO has been quoted as saying that he has saved close to $50000 using this method of payment, money that has been well used for his Research and Development department.
A Melbourne coffee shop has started accepting Bitcoin and more importantly but not in the same continent, two well-known Las Vegas casinos are now accepting Bitcoin as an acceptable payment option after a number of customers requested it.
Should The Aussie Online and Mobile Casino Use Bitcoin?
Taking all this into account does not mean that Bitcoin is the right choice for online pokies Australia casinos and especially the mobile casinos. There is still so much unknowns surrounding Bitcoin including the volatile nature of its value that trades at crazy differentials. In the future, using Bitcoin may the way to go if there are more coins produced and it may change from fad to a fact.
The rate of production will have to increase for mobile and online casino users to be comfortable enough to use it and the value will need to plateau out with a more or less steady value being assigned to the Bitcoin and not the fluctuations it has been showing of late. At present, it is thought to be a secure way of trading but hackers have still been able to get into the Bitcoin systems and their algorithms together with the special Bitcoin e-wallets that have been set up, which raises a red warning flag for many potential users.
There are no denominations for the Bitcoin, and this may need to be thought through more clearly if Australian online pokies casinos will benefit from adopting Bitcoin as a payment method. To date there are only approximately 12 million Bitcoins in use, which is a rather limited number considering the widespread popularity of the Australian online casino and this together with the fact that one of Australia’s allies and neighbours, China have banned the use of Bitcoins, also puts a negative tilt on the whole idea.
(In December 2013 the Peoples Bank of China prohibited the use of Bitcoins for real trading). The online pokies Australia casinos and mobile casinos do like to be innovative and keep up with the demands of their clients but in the case of Bitcoin, it may be best to watch and wait and see if this really is the way to go, all pointers suggest that for the moment, Bitcoin trading is something to be observed closely at a distance with plans in place if and when it becomes more accepted and a steadier virtual currency to use.