Crypto-currencies like bitcoin have because popular thanks to ramsonware and darknet markets like the SilkRoad. By far the most popular use case, however, is online gambling. A growing number of countries, including the United States and Australia, are introducing tougher anti-gambling legislation that makes it difficult for online poker rooms, sportsbooks and casinos to operate within their boarders. Governments who want to shutdown online gambling activities typically prohibit financial institutions from processing transactions linked to online gambling. Since bitcoin gambling sites do not rely on traditional baking methods, these restrictions are ineffective. Crypto-currencies enable peer-to-peer transactions that can’t be censored by any government and give online gamblers the freedom to indulge in a favourite online pastime.
Bitcoin is by far the most popular crypto-currency in the world. At the time of writing, it has a market cap in excess of $20 billion dollars and has more hashing power securing the network than all the rest combined. Bitcoin is the ideal crypto-currency for beginners because its infrastructure has already been built out. There are now dozens of bitcoin exchanges operating around the world, including big names like GDAX, Bitfinex, BitStamp and Kraken, where you can buy bitcoin with your credit or debit cards. There are also over 1,000 bitcoin ATM machines operating in every corner of the planet. Sites like Paxful and Localbitcoins make it easy to buy and sell bitcoin face to face, wherever you live.
Bitcoin also has the greatest selection of bitcoin wallets for PC/Mac, iPhone, Android and Windows Phone. Popular free wallets include Mycelium, Blockchain, Xapo, GreenAddress and Coinbase.
One drawback is that the bitcoin network can currently only process between 3 and 7 transactions per second. The popularity of this crypto currency has created more demand than the network can facilitate, which has increased both the waiting times and average fees. To get your transaction confirmed within an hour typically costs less than $1 so it’s still significantly cheaper than using a traditional payments methods like Visa and Mastercard.
Litecoin was developed to be the silver to bitcoin’s gold and uses the same codebase so they are very similar crypto-currencies. One major tweak is that Litecoin transactions confirm every two to three minutes, while bitcoin confirmations typically happen every 10 minutes. Fees are also much lower because there is less congestion on the Litecoin network.
The downside to using Litecoin for gambling is that there are far fewer exchanges selling it compared to bitcoin. The good news is that many bitcoin ATM’s give you the option to buy Litcoin if you wish. Another option is to buy bitcoin and then convert it to Litecoin on exchanges like Poloniex that specialize in alt-currency conversions.
While a growing number of bookmakers, casinos and poker rooms have begun accepting Litecoin, it is still the exception rather than the rule. BetOnline, a major U.S. facing traditional sportsbook, has recently begun accepting Litecoin. Popular bitcoin poker room and casino BetCoin now also accepts Litecoin.
Many people think that bitcoin is anonymous but that’s simply not the case. Bitcoin is essentially a giant open ledger where every transaction ever made on the blockchain can be traced. If you buy bitcoin on an exchange that requires KYC/AML then any purchase made using that bitcoin can be traced back to your name. This isn’t really a problem if you are just planning to use your bitcoin to play a few hands of Texas Hold’em in the U.S. but it may cause problems if you are buying a boatload of cocaine.
In the United States the government does not prosecute online gamblers so bitcoin offers more than enough anonymity for the average gambler. Online gamblers in some middle-eastern countries may require a greater level of anonymity to avoid prosecution so crypto-currencies like Monero are an ideal solution. Monero gained popularity this year when it was added as a payment method on the popular darknet market AlphaBay. AlphayBay added Monero because it allowed their customers to buy drugs and other contraband with total anonymity.
The downside to Monero is that it is currently quiet difficult to buy. You can use services like ShapeShift and Poloniex to convert your bitcoin to Monero if you are very paranoid. There are also a limited number of Monero wallets available although we are sure that this will change in the near future due to its popularity.
The best place to gamble with Monero is Fortune Jack. Fortune Jack are a popular casino and poker room that accept 9 different crypto-currencies, including Bitcoin, Litecoin, Monero, Dash and Dogecoin.