Shout-out to @MattskiMartinez for first reaching out to me two weeks ago on Twitter:
I know I said I’d write something “in the next few days” and am super late with this (partly because Kieran and I were making said enjoyable podcasts), but here it is: a beginner’s guide to betting on sports online with Bitcoin.
What Is Bitcoin?
The answer isn’t as straightforward as you’d think because Bitcoin is actually multiple things. On one hand, you have bitcoin-the-token, a snippet of code that represents ownership of a digital concept – sort of like a virtual IOU. On the other hand, you have bitcoin-the-protocol, a distributed network that maintains a ledger of balances of bitcoin-the-token (CoinDesk). The Bitcoin story has so much more to it than just headline-grabbing pricing swings. It incorporates technology, currency, math, economics and social dynamics. It’s multifaceted, highly technical and still very much evolving (CNET).
Anyway, the aspect that most sports bettors care about is Bitcoin’s utility as a currency. From a non-technical user perspective, Bitcoin is nothing more than a mobile app or computer program that provides a personal $BTC wallet and allows a user to send and receive bitcoin with them. You could think of it as just a “virtual currency” or “digital cash”.
A few characteristics of Bitcoin:
- It’s decentralized and open-source. Bitcoin uses peer-to-peer technology to operate with no central authority or banks; managing transactions and the issuing of bitcoins is carried out collectively by the network. Bitcoin is open-source; its design is public, nobody owns or controls Bitcoin and everyone can take part.
- It’s pseudonymous. You can send and receive bitcoin without giving up any personally identifying information.
- It’s fast and borderless. Bitcoin transfers/payments have minimal fees (you can actually choose your own fees) and are extremely quick (sometimes virtually instant). You can send and receive Bitcoin to and from anyone and anywhere.
- It’s secure. It’s cryptographically impossible to counterfeit a bitcoin. It’s also mathematically virtually impossible to “hack” the network.
- It’s divisible. Most fiat currencies can only be divisible to the cent (1/100th of a unit). Bitcoin is currently divisible up to 8 decimal places.
- It’s portable. I mean yeah, it’s virtual.
There’s a lot more to Bitcoin than that. If you’re interested, you can learn more about Bitcoin at bitcoin.org (that’s dot org, NOT dot com).
Why I Started Betting With Bitcoin
A few years ago when I started gambling in my college dorm room/apartment, I bet on sports and played poker/blackjack on offshore sportsbooks and online casinos. Winnings withdrawals were initially made via checks sent by mail, an inefficient process that often took several weeks to complete. I came across Bitcoin one night in an attempt to find a better way to transfer my money, and instantly fell in love with it.
Important Things To Consider
- Volatility: It’s mid-2018, and the price of $BTC still fluctuates a lot (if you haven’t noticed). Keep in mind that this could be a great thing (it could compound your profits if you bet on a book like Nitrogen and the price of $BTC goes up) but it could also obviously be a bad thing for the same reason (if the price of $BTC goes down).
- Personal Information: If you’re like me, you don’t want to have to send your government IDs and stuff to random offshore sportsbooks on the Internet and have your info floating around. Traditional fiat currency websites will almost always require you to validate your identity. Bitcoin books like Nitrogen do not; you don’t even need to give your name.
- Security: If you start using $BTC, understand that all security measures regarding your funds are in your control. That’s the beauty of it: YOU are your own bank. At the same time, it’s paramount that you have smart security habits. NEVER give anyone your private keys.
- Irreversible Transactions: Once you click “send” during a $BTC transaction, you can never undo it. There are no “refunds” or “re-dos”. Make sure you send everything to the correct address(es)!
How To Bet With Bitcoin
Here’s what I would do if I were starting out today:
- Learn about the basics of Bitcoin. Seriously, if you’re going to put your money into something or use it to transfer your money, please take the time to understand what the the hell it is. Google is your friend.
- Create your Bitcoin wallet. Many people believe (incorrectly) that Bitcoin wallets are software programs where bitcoins are “stored”. To be technically accurate, bitcoins are all stored on the blockchain on the Bitcoin network. Your wallet is a collection of “private keys” or a client software used to manage those keys and make transactions on the Bitcoin network.Regardless, you’ll need one to control, send, and receive your bitcoin. For beginners, the easiest to set up would be a desktop wallet like Electrum or a mobile wallet like BRD or Mycelium. For more security, I’d recommend a hardware wallet like a Trezor or a Ledger. Personally, I use Mycelium and a Ledger Nano S.
- Create an account on an exchange. The way to acquire Bitcoin is just like how you’d acquire any other traditional fiat currency (the US Dollar, Euro, Japanese Yen, Korean won, Chinese yuan, etc.): you trade it on an exchange. There are many cryptocurrency exchanges out there. I’d recommend Coinbase or Gemini for $BTC/$USD swaps. (If you’re from outside of the USA and want to exchange your not-US-Dollar fiat currency to Bitcoin, search up the best exchange for you.)
- Buy bitcoin. On the exchange you signed up on. Or… I believe many wallets now have integrated with exchanges so you can buy bitcoin directly in your wallet app. Regardless, I prefer using large exchanges like Gemini because there’s far more liquidity and often more attractive exchange rates and lower fees. Important note: you can buy a fraction of a bitcoin.
- Send the bitcoin you just bought to your Bitcoin wallet address. This is typically pretty straightforward. Just click “send” and follow the logical steps to send your bitcoin to the address shown in your Bitcoin wallet. After you’re done, pat yourself on the back! You are now offically a Bitcoiner! Important notes: Bitcoin transactions are IRREVERSIBLE. Your Bitcoin wallet address may (and probably will) change after you use it. This is normal and done for security purposes. Sending bitcoin to any of your previous addresses will still work.
Some (most) sportsbooks out there allow you to deposit and withdraw using bitcoin, but still operate 100% in fiat currency (like the $USD). When you choose to deposit via bitcoin, they will ask you how much money in $USD you’d like to deposit, offer a current $BTC/USD exchange rate, give you a $BTC address, and tell you how much $BTC you should transfer to said address. After your deposit is received (typically within minutes), it will be converted into the corresponding $USD value and you can disregard everything about bitcoin until you decide to withdraw, in which case it’s the exact same process as depositing but in reverse. The two books in this category that I use are Bovada and 5Dimes.
Others are purely bitcoin only, meaning everything on the platform from deposits to placing and winning/losing bets to withdrawals are done solely in $BTC. My favorite $BTC book is Nitrogen (BY FAR). I’ve also used CloudBet and have had no issues with it, though it’s now no longer available for US players.
I am not in any way affiliated or sponsored by Nitrogen. This is an authentic user review.
Nitrogen is currently my go-to sportsbook for the vast majority of my wagers (and has been for a few years now). It’s been consistent and reliable, there’s always support staff on hand that you can chat with live on the site, and deposits and withdrawals are quick and virtually free. I’ve never had a single problem with it.
With that said, it’s important to note that Nitrogen is far from a “perfect” sportsbook:
- Very limited bet selection. If you’re big on prop betting, live-betting, or even stuff like futures, I’d look elsewhere (I use Bovada and 5Dimes). Definitely no (or very rarely are there) creative wagers.
- Limits increase to full amounts only an hour or two before event start times. If you’re a bettor who consistently places 1+ $BTC per wager at opening lines/prices, Nitro might not be the best choice for you. The limits generally open at 1/4 – 1/2 what they end up around game time, and are raised only a few hours before.
- Heavy juice on many events. No reduced juice lines will be found here, haha. Best book for reduced juice that I use: 5Dimes.
With that said, Nitrogen is awesome for betting on spreads and moneylines!
TL;DR – How To Bet With Bitcoin
Shortened basic step-by-step guide:
- Create $BTC wallet on your phone (BRD for iOS, Mycelium for Android)
- Create account on Coinbase or Gemini. Buy $BTC.
- Send $BTC from exchange to your wallet.
- Create account on Nitrogen.
- Send $BTC from your wallet to your Nitrogen account.
- To cash out: withdraw $BTC from your Nitrogen account to your wallet, send from wallet to exchange, exchange to fiat currency, and withdraw to your traditional bank account.
- Have fun betting!