An Overview of Bitcoin Wallet Options

An Overview of Bitcoin Wallet Options

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Bitcoin is a digital currency that is designed to operate without the oversight of a central bank, making it much less susceptible to inflation risk than large national currencies. Although other 'cryptocurrencies' such as Litecoin have crashed on to the scene in recent years, Bitcoin is still the most popular new age tender by a mile. This increasing popularity hasn't escaped the notice of iGaming commentators, some of whom think it may soon be possible to deposit on top gambling sites via Bitcoin 'wallets'. Sound confusing? It isn't.

How Does It Work?

The Bitcoin system is supported by three pillars: a large virtual network, a branch of mathematics called cryptography, and an open-source code developed by a person (or persons) under the pseudonym Satoshi Nakamoto in 2008. All Bitcoin users share a public ledger, called a block chain, that holds a chronological record of transactions. These transactions are confirmed or 'secured' by mathematical proofs that encrypt data and make it extremely difficult to spend another user's bitcoins or corrupt the ledger.

Cryptography is also a key part of a process called 'mining' that involves making computer hardware perform calculations needed to confirm Bitcoin transactions. Although it is widely known that users can earn bitcoins for allowing their CPUs to be used for this purpose, mining has become extremely hardware-intensive and is no longer an easy way to acquire the currency. Moreover, it's a common misconception that users need to mine in order to use Bitcoin – this simply isn't true, and in fact, e-gamers can make make the switch from traditional banking systems with very little effort at all.

What is a Bitcoin Wallet?

In order to use Bitcoin to make deposits and withdrawals, users must first choose a 'wallet' that operates like a Bitcoin bank account: wallets let users receive, store and send bitcoins to other parties. Most Bitcoin wallet software is available on several platforms, and it's not unusual to find wallet solutions that are compatible with both desktop systems such as Windows, Mac OS and Linux, and mobile platforms including Android, iOS and Windows Phone. Software wallets are available in both downloadable and web-based formats – and while web services are undoubtedly easier to use, outsourcing storage means that users must put their trust in third-party providers.

Those worried about the security of wallet software can also choose hardware wallet options. These are usually small USB-type devices that contain private address keys needed to spend bitcoins. Both software and hardware wallets can be filled by visiting an exchange that allows bitcoins to be traded for other world currencies. Users can also buy the currency privately from other users or accept bitcoins as payment for goods and services.

Key Features

It's important to bear several universal risks in mind when choosing between wallets. Firstly, as a new currency, Bitcoin is still very volatile – the price of a single unit can rapidly increase or decrease without warning. Secondly, Bitcoin payments are irreversible, so it's extremely important to back up and encrypt all currency-related data.

After security considerations, the most important factors to consider are control and validation. While many services offer full user control over funds, others require transaction authorisation by wallet providers, sometimes resulting in lengthy waiting times after each attempted transfer. Some users gain control over their cash by running a node on the Bitcoin network that doubles up as a wallet, which means that there is very little third-party involvement in fund management. The drawback to this method is that running a full node entails complex security risks of its own and requires a lot of hard drive space, often over 20GB.

Options

Users can choose from a wide range of wallets, some of which, such as Blockchain and GreenAddress, provide mobile and desktop solutions from a single account. Several other big names, including MultiBit HD and Armory, operate on a desktop-only basis.

A much smaller range of providers focus on mobile solutions; Coinomi and Airbitz are two of the most prominent outfits in this niche. Users who wish to have a physical purse can go for Trezor and Ledger Nano products that are marketed on the strength of their class-leading security.

Given the relative novelty of the entire Bitcoin system, it isn't surprising that only a few online casinos accept the currency. However, specialised operators like BitCasino.io and FlutterClub are gaining in popularity, and it seems likely that some of the industry giants will become Bitcoin-friendly soon.

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