This review predominantly focuses on ways of generation of decentralized anonymous digital currency - Bitcoin (Bitcoin, BTC). It was originally invented on the Internet and used only in online spaces, having no material equivalents in a form of coins or banknotes. Also, Bitcoin is commonly called a cryptocurrency, since all processes are based on a reliable cryptography (encryption). This currency is not regulated by any institution, and its emission is based on complex mathematical algorithms generated by millions of computers around the world.
What is Bitcoin? Why is it so popular today and why is it applicable to the gambling market in particular? What is so special about this currency and how are anonymity and security ensured? These and the rest of important issues were thoroughly reviewed by Slotegrator’s experts.
Why is Bitcoin so popular today?
As a monetary unit, Bitcoin guarantees complete anonymity and security. It functions according to the principle of peer-to-peer network technology. Previously, it was used exclusively for file exchange between computers. The main advantage of its implementation as a cryptocurrency, is that the peer-to-peer technology of the encrypted computer network does not require a common center.
It means that Bitcoin is not controlled by any existing financial regulator, so that such regulators do not influence its course, transactions, money supply, etc.
Bitcoin´s program code usually limits currency amounts, so that there can be no more than 21 million of them in a turnover. Its generation, called “mining”, is carried out by using supercomputers, capable of processing the most complex mathematical codes. The core principle of any Bitcoin system: the more Bitcoins are released, the harder is to get the new ones.
Bitcoin network statistics per 24 hours
|Bitcoins mined||38750 BTC|
|Time between blocks||9.29 min.|
|Size of blocks||54.362565 TB|
|Number of transactions||105800.00|
|Estimated number of transactions||$38 604 894.00 (1 930 688 656 22 rubles)|
|Bitcoins sent||16 276 622 817 604 BTC|
|Weighted market price||$237. 18 (11 861. 73 rubles)|
|Business volume in hard currency||$ 1 446 579.25 (72 345 597. 98 rubles)|
|Business volume in Bitcoins||6 099.08 BTC|
|Acquisition of “miners”||150 . 97 BTC|
|Total income of “miners”||$ 922 630. 20/ 3 890.00 BTC (346 142 120.25 rubles)|
|Operating income margin of “miners”||0.00%|
|Actual complexity of mining||4 764 339 8017.803 (to increase in 231 mined blocks)|
|Intensity of hashing||367 096 755.04 GH/s|
|General electric power consumption rate while mining||0.00 mega watt/hour|
|Electric power consumed while mining||$0.00 (0.00 rubles)|
General currency statistics
|General number of blocks mined||356 600|
|General number of Bitcoins mined||14 164 575 BTC|
|General number of Bitcoins involved into transactions||95 495 429 321 587 BTC|
Data provided by www.bitkurs.ru/stats dated March 01, 2017.
Another feature of Bitcoin is its flexibility in terms of investments. Its high volatility makes it appealing for those who like to benefit from currency difference, as previously a lot of people managed to make fortunes on such currency swings. It also evokes certain feelings of “thrill of the race” that involves not only luck, but also analytical skills, prognosis making, ability to estimate and predict two steps ahead.
Bitcoin officially appeared on market back in August of 2008. Since that time, its rate has been increasing steadily, however fluctuating greatly. There were certain periods when its price accounted for less than 1$, nevertheless, soon it could skyrocket up to 1000$.
The current rate of Bitcoin accounts for 1200$, which is the maximum that has been ever recorded for this very type of currency.
The dynamics of Bitcoin rate in relation to USD rate is presented in the following graph:
Data provided by www.tradingview.com dated March 1, 2017
According to the data provided by Slotegrator´s experts, it is expected that popularity of Bitcoin will keep increasing in 2017 followed by significant growth in capitalization of this cryptocurrency. Bitcoin has also turned out to be instrumental in online casino businesses. Security and anonymity of financial transactions have always been crucial for the gambling industry. That’s why online casino projects based on Bitcoin are becoming one of the top requests of gambling operators on the current market all around the world.
Cryptocurrency and its legal status
Having discussed what Bitcoin is, let’s take a closer look at its legal status. Seems like it’s one of the fundamental questions when it comes to carrying out payments in this type of currency. None of contemporary legal codes has clear definitions for cryptocurrency, and, consequently, no appropriate norms for its regulation. Such norms can vary according to the country; however, they can be divided into two major groups:
- Countries where Bitcoin turnover is not prohibited and where its usage will be shortly included into legal codes:
- Check Republic
- New Zealand
- South Korea
- The UK
- The USA.
- A list of countries where cryptocurrency is considered to be illegal or its use is strictly limited:
As you can see, the majority of developed countries permit financial tranzactions in Bitcoin. However, there are no statutory definitions for the notion of cryptocurrency. That’s why legal status and legislative norms applicable to this currency vary greatly depending on a country. For instance, in the USA any actions involving Bitcoin tranzactions are regarded as business, providing cash management services and are subject to registration and accounting. As for Bitcoins themselves, in the USA they are qualified as valuable assets that are subject to proper taxation.
In Canada Bitcoins are viewed as income obtained from business activities. In Finland, this type of currency is considered as financial operations, so that they are not subject to value-added taxation. Nevertheless, in the majority of cases European legislation considers Bitcoins more as blue chip, rather than money.
As for the countries prohibiting use of Bitcoins, there are still no unanimous views. In some countries like the Russian Federation, Bitcoin is regarded as fake currency by law and its use in payments is officially forbidden. However, the legal code undergoes constant changes, so that legalization of Bitcoin in Russia might eventually happen in the near future.
Iceland strictly controls its own currency deflux. That’s why Bitcoin turns out to be a real threat for the monetary policies of this very country.
Some of the countries, like Vietnam, treat cryptocurrency tranzactions as financial crimes, so carrying out Bitcoin tranzactions is prosecuted. Bitcoin is also forbidden in Ecuador, as long as this country has recently launched its own digital currency.
In China, cryptocurrency transactions are forbidden only for financial institutions, while the population can use it freely. Another interesting fact is that Chinese Bitcoin market is one of the biggest in the world.
Why does legalization of Bitcoin seem so complex and imperfect? Why do countries prohibit and limit its use? What are the governments afraid of? The answer seems as simple as this: it is not controlled by any of the existing regulators, as well as it is not subject to any rules or limits regarding its turnover. Moreover, it is probable that cryptocurrency will become a foundation for the world’s next decentralized economy, controlled by market members only. In addition, it seems not very beneficial for the governments. However, this process cannot be stopped already.
Security and features of Bitcoin payments
Digital signatures assure security of Bitcoin transactions. Financial, commercial, and governmental institutions have successfully implemented this identity proving technology into their business routines.
Transactions are usually carried out as follows: currency units are transferred from certain Bitcoin addresses to some other addresses, stored in Bitcoin wallets. In order to use Bitcoin wallets, users should install special software.
While making transactions (payments or money transmissions) users open their Bitcoin wallets by inserting a special code, indicate a certain amount of money and a Bitcoin address of the recipient, and finally certify this transaction by a digital signature.
Afterwards, miners (users that provide smooth Bitcoin network functioning by offering their highly-efficient computers) include a transaction into block of transactions and register it in a chain of information blocks, in such a manner confirming this operation.
In such a way, each transaction passes a couple of verification and confirmation stages. Commission for such transactions is not charged.
Within gradual growth of Bitcoin popularity, the number of Bitcoin transaction has also increased significantly. However, a lot of users started complaining about delays and time-consuming processing of Bitcoin operations.
In this case, in order to prevent further negative feedback, it is highly recommended to charge commission from those miners who are willing to accelerate Bitcoin transaction processing process. Notifications about successfully executed payments are instantly sent to recipients’ Bitcoin addresses.
Bitcoin popularity by region
Every day there appear more and more possibilities to pay for products and services online with Bitcoin. Here is some statistics on usage of this cryptocurrency in different countries:
Data provided by https://bitnodes.21. dated March 1, 2017
Geography of Bitcoin distribution dated March 1, 2017
As you can see, the biggest hubs of Bitcoin use are the most economically developed countries: the USA, Western European countries, and Asian countries.
To sum up everything said above, Slotegrator’s experts would answer the question “ What is Bitcoin today and tomorrow?” by saying that it’s the first in the world’s history digital currency that is not controlled by a centralized regulator.
On the one hand, Bitcoin assures complete anonymity, on the other - all the financial transactions are crystal clean.
Consequently, taking into account the rapid pace of technological development and evolution of Internet marketing, Bitcoin is a currency of the future!