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Bitcoin Poses Challenges for Internet Gambling Operators

Not many people have heard about Bitcoin the online currency. Bitcoin has gotten a bad rap because of its association with the drug selling website Silk Road. Bitcoin enables anonymous transactions. Many internet gamblers in the United States have already used Bitcoin especially if they play at offshore websites. Some experts say that bitcoin has the potential to revolutionize the online economy. Bitcoin is especially popular with those opposed to government controlled currency and the quantitative easing that has created volatility in currency markets worldwide. There are actual reputable currency exchanges that trade bitcoins and the virtual currency has an exchange rate just like any other currency.

Last year Bitcoin gained a foothold in the traditional banking sector. Previously bitcoin had been dismissed by many as virtual ‘play money.’ In December 2012 a Bitcoin currency exchange in France became the first bitcoin exchange to operate in the European banking system. Paymium, the parent company of bitcoin, will offer customers a legitimate French payment account. Users will be able to purchase Euro priced goods with a debit card. Last year the number of bitcoin users exploded. The popular blogging site WordPress accepts payments in bitcoins. Currently one bitcoin is worth about $13 USD.

Bitcoin was launched in 2008, the same year the global financial crisis hit. Bitcoin is often described as an alternative to fiat currencies. Bitcoin has no central issuer and is controlled by a peer to peer network. For Americans that love to gamble online bitcoin can be a solution for avoiding those pesky laws and regulations limiting the ability of banks and other financial institutions to process gambling related transactions. Today many internet gambling sites use bitcoins for deposits and withdrawals. Conor McCarthy of Switch Poker described the challenges of offering bitcoin to players. McCarthy stated” Bitcoin’s ability to forego the use of banks and online e-wallets by sending payments directly to the consumer eliminates the ability to reverse a transaction. This means that fraud issues need to be handled differently. Extra checks are performed before sending Bitcoin payments out.”

Security presents another challenge. McCarthy said that “with Bitcoin you have the option to store the funds yourself” instead of dealing with a third party processor and “this comes with risks. Precautions must be taken to ensure your Bitcoin wallet is kept safe, as a security breach could spell disaster.”  Despite the challenges posed by bitcoin most gaming experts say that its use will become more common in the near future. For some players that move can’t come soon enough!

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