DigiBookie Kicking Off The New Online Gambling Trend: BitCoin Deposits

DigiBookie.com, based out of Curacao, is now offering the deposit option of BitCoins, a trend many in the online gambling community believe will soon be taking off.

Hampered with limited payment processing solutions, these Web betting firms are stretching the limits looking for new options. 

Bitcoin is a peer-to-peer digital currency. Peer-to-peer (P2P) means that there is no central authority to issue new money or keep track of transactions. Instead, these tasks are managed collectively by the nodes of the network. Advantages:

•   Bitcoins can be sent easily through the Internet, without having to trust middlemen.

•   Transactions are designed to be computationally prohibitive to reverse.

Be safe from instability caused by fractional reserve banking and central banks. The limited inflation of the Bitcoin system’s money supply is distributed evenly (by CPU power) throughout the network, not monopolized by banks.

Bitcoin can be converted using PayPal.  The total BitCoin economy has a value of £39m.  It is up more than 22,000% annualized.

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For the newbies and some of us involved with Gambling911.com, it may be a challenge to figure out the Bitcoin concept.  Companies like DigiBookie and others in the sector could potentially build a niche among a more tech savvy crowd, predominantly younger.  Maybe the Farmville and Zynga Poker crowd comes to mind. 

Charles A. Jaffe of the Newark Star Ledger describes the BitCoin revolution as something akin to the Wild West.  He writes:

Bitcoin adopters set up a digital wallet at a Bitcoin bank/exchange, and then find someone to sell them units of the currency in exchange for a traditional currency. But if they are not technically savvy in using their digital wallet, or their computer is hit by a virus, or their Bitcoin exchange is run by a 12-year-old with the ability to set up a Web site (because even supporters acknowledge that a kid with some tech savvy could start a Bitcoin bank tomorrow) or a fraud artist, their money could disappear at any time.

"Right now, the truth is that Bitcoin has three major problems," said Bruce Wagner, host of the Bitcoin Show on OnlyOneTV.com. "Number one is security, number two is liquidity and number three is currency risk. … Bitcoin itself is rock solid – it’s not like people stop trusting the dollar because of bank robberies – but the infrastructure has to be improved, and those issues are all being addressed at light speed."

And then there’s the good ‘ol FBI that’s always at least one step behind, but one step close enough to cause headaches down the road.

In a March 18, 2011 press release regarding the Liberty Dollar case, the FBI admitted to waging a secret war against any private currency system that competes against the US Dollar. In the press release, the FBI equates the use of sound money to an act of domestic terrorism. The FBI states that it uses methods of infiltration and disruption against private citizens engaged in the use of voluntary currencies. –Libertarian News

Jaffe, who is also the Senior Columnist for MarketWatch, notes:

There may well be a global financial role for this kind of currency going forward.

But until the execution is as sound as the concept is cool, there’s too much risk of a total loss. For average investors, that makes Bitcoin a look-but-don’t-touch situation.

- Alejandro Botticelli, Gambling911.com