Against the backdrop of the international recession and the European debt crisis in 2009, confidence in banks and fiat currencies declined significantly. It was the global crisis that created ideal conditions for the birth of the most popular cryptocurrency – bitcoin.
Bitcoin from experiment to currency
It all started in the 90s, in the heyday of the Internet, developers and computer geeks began to think about creating their payment system. They wanted to create a system that would be independent of the government, various state institutions, and banks. However, due to the lack of necessary resources at that time, all their attempts failed. This continued until autumn of 2008.
October 31, 2008, hundreds of IT specialists received a letter from someone called Satoshi Nakamoto. The link in the letter led to the website of a new payment system Bitcoin working on the Blockchain technology.
Meanwhile, the world was in economic crisis. The oldest American Bank, Lehman Brothers, collapsed. Such major mortgage companies as Fannie Mae, Freddie Mac, and AIG were on the verge of bankruptcy. This prompted the US, UK, France, Ireland, and other European governments to invest hundreds of billions of dollars in saving their banking systems. Back then, many citizens lost not only their money but also trust in banks.
- Year 2008: the official website of Bitcoin, the decentralized payment currency, was created;
- Year 2009: the release of the first Bitcoin client and creation of the first block;
- Year 2010: appeared the first centre for the exchange of digital currency;
- July 2010: the first Bitcoin exchange – MtGox, owned by Jed McCaleb, began operating.
- Year 2011: noticeable decline in demand for digital currency.
Bitcoin remained in the shadows until 2013, when the second wave of the financial crisis flooded Europe. It was then that the people realized they needed a new way to keep their funds, so as not to depend on any bank or government. Bitcoin turned out a perfect solution for this.
The legalization of bitcoin
It is in the interest of any state that all the financial transactions and cash flows are under its control. The Central Bank can control any transactions going through the accounts of customers. There is always intermediary between the user and any other counterparty. It is either bank or tax supervisory authority.
Bitcoins have created a system that eliminates the need to work with third parties. When making any financial transactions, the user contacts the counterparty directly. This excludes the intermediary from the chain. This is the main reason why many states have not yet legalized cryptocurrency. Still, despite concerns, some countries have legalized digital money.
Сountries where cryptocurrency is legalized
May 2017, the Japanese government issued the Payment Services Act that legalized cryptocurrency defining it as a property value. Which means any cryptocurrency is subject to goods and services tax. Japan is the first major non-offshore jurisdiction that legalized cryptocurrency. This caused the crazy course growth and a boom in mass media.
Singapore is the second jurisdiction that legalized digital money. In Singapore, as in Japan, the cryptocurrency is legalized as property value and is subject to goods and services tax.
Switzerland is another large jurisdiction that legalized crypto. The currency was first legalized as a means of payment in the Canton of Zug. Today, Zug is a haven for many large crypto-companies. In particular, the main office of Ethereum is located there.
After Switzerland, crypto-money was accepted in Denmark and Sweden.
In addition to the above countries, bitcoin is a legal means of payment in Canada, the Czech Republic, Norway, Germany, Estonia, South Korea, the Netherlands, Finland, and the USA.
Cryptocurrencies are prohibited in Iceland, Bolivia, Ecuador, Bangladesh, Kyrgyzstan, Vietnam, Indonesia, China, and other Eastern countries.
Today, many states have not yet decided on the status of the cryptocurrency. Australia is a vivid example. Despite the desire of many officials to equal the digital currency to fiat money, the authorities are in no hurry to do that. To support their bill on the crypto legalization, two senators even created a group "Parliamentary friends of blockchain."
The UK also gets to choose. Now, cryptocurrency is considered as foreign currency, and it is being actively introduced into the British society. For example, in many local bars, you can pay with crypto.
Crypto status in Russia
The situation with cryptocurrencies in Russia is quite ambiguous. They started discussing digital money in 2014 – 5 years after the bitcoin emerged. At first, the cryptocurrency faced a number of prohibited sanctions from the Russian government, but now the situation has changed for the better. So, July 1, 2018, Bill on digital financial assets was drafted. It assumes the legalization of the cryptocurrency in the country. The draft is now under consideration.
Bitcoin casinos today
Betcoin.ag and Seals with Clubs were the first online casinos to use crypto for wages. The first regular online casino that introduced bitcoin was BitStarz. Players there can bet on real money and crypto.
However, not all countries where cryptocurrency is legalized show similar loyalty to online gambling. To obtain permission on gambling activity in such crypto-countries as Germany, the Netherlands, Denmark, Estonia and Finland, the gambling resource must obtain a license from the local regulator. This applies to both foreign and local operators.
In Switzerland, Sweden, and Norway foreign gambling sites can operate without license. In turn, local gambling resources must obtain permission from the local regulator.
The number of bitcoin casinos increases every day. The most popular ones are:
Choosing bitcoin casino operators are guided by 3 important factors:
- financial crypto-transactions are not controlled by the state or banks;
- crypto-transactions are often not taxed;
- as a rule, such activities do not require licensing.
In general, all bitcoin casinos can be divided into 2 groups:
- "regular" online casinos where digital money is one of the payment methods: used for deposits and withdrawals;
- crypto-casinos that accept and pay out only cryptocurrency. In this case, digital money is the only available means of payment.
The first group consists of usual gambling resources that operate as legal entities under official license. As a rule, such casinos do not guarantee the anonymity of users' data.
In the second group, where bitcoin is the only means of payment, it is much more complicated to obtain permission. In this case, you need to consider the following points:
- whether gambling activity is allowed in the chosen region;
- is gambling activity subject to licensing;
- whether the cryptocurrency has an official status.
Satoshi Dice, CloudBet, Vegas Casino are the gambling resources offering bitcoins as a single means of payment.
When opening crypto-casino, in the first place, you should consider the legality of the cryptocurrency in the country. You can find it out directly at the Ministry of Finance in the chosen territory.
To sum up
To date, the chances that bitcoins will become a universally accepted means of payment are very low. This is because the cryptocurrency is decentralized, which excludes the intervention of central banks. And if government cannot control something, they won’t approve it.