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How to Bet With Bitcoins

How to Bet With Bitcoins

Learn how to bet with bitcoins and other cryptocurrencies

The financial demographic of online betting is changing — in a big way. Projections for 2021 said that cryptocurrency would fund over 40% of online bets, and that number seems to only be trending up.

It’s easy to see why crypto sports betting is becoming more and more prominent in online gambling circles. Cryptocurrency is more private and sometimes more secure than traditional fiat funds.

Whether you’re new to crypto or want to try betting with your existing investments, we’ve put together a tutorial on how to bet with bitcoins below. 

Table of contents

Use the links bellow to jump to each section

Before You Bet: Bitcoin Basics

We’re going to start from square one, for readers completely new to cryptocurrency. We’ll cover cryptocurrency, bitcoin, and some basic purchasing facts before we dig into the how-tos of bitcoin gambling.

What Is Bitcoin?

Bitcoin was first introduced in 2009 and is one of the oldest cryptocurrencies. It’s also probably the best known. For a lot of people, Bitcoin is the first thing that pops up in any cryptocurrency conversation.

So What’s Cryptocurrency?

Cryptocurrency (also known as “crypto”) is a virtual currency that’s been developed through complicated computational math. Instead of a bank, crypto is decentralized and stored through a series of shared databases.

All crypto transaction information gets permanently logged in a public blockchain. 

This can be good or bad. Every transaction is thoroughly checked to avoid falsifying funds or potentially double-spending your crypto. But on the other side, if your crypto wallet is hacked there is no bank or “authority” that can refund your money. It’s just gone.

This is why all crypto buyers need to keep the private key associated with their crypto wallet as secure as possible. Each wallet has a public key and a private key, with very different uses.

Public Key

Think of your public wallet key like a Cashapp or Paypal handle. It’s the public identifier you use to receive cryptocurrencies from other individuals or platforms.

Private Key

The private key to your crypto wallet gives someone complete control over their cryptocurrencies. It’s like the password that allows you to send or withdraw your currency. 

This private key needs to be highly secure – ANYONE with access can move your money without your knowledge or permission. But be extra careful: if you lose or forget your key, no one can reset it for you.

What About Blockchain?

Blockchain technology forms the foundation of modern cryptocurrency, which could not function without it. 

It’s a complicated technology, but worth explaining a little to fully understand how cryptocurrency (and therefore Bitcoin) transactions work. At its core, blockchain technology is a method of storing data so that it can be viewed, but not edited.

Blockchain relies on a shared, distributed computing network instead of a centralized data warehouse. This shared nature is key to its transparency. Transaction information recorded in blockchain is visible to anyone with access.

We’ll use a Bitcoin transaction as an example. If one person sends Bitcoin to a friend, the blockchain system will check that transaction information to make sure it’s a valid exchange and that no double-spending is happening. 

Once the transaction is verified, its details will get stored in a “block” of data. We know this sounds kind of vague, so it might help to picture these blocks as metal boxes of important files.

Each “block” has a limited amount of storage space (kind of like a physical box). Once that storage space is filled with logged transactions, the block gets sealed. 

This “sealing” in blocks is one part of what makes blockchain information unchangeable. The other is the “chain.” Each sealed block is attached to the one sealed before it.

This attachment — the “chain” part of blockchain — is the other aspect of security that defines the technology.

Once a block is in the chain, it cannot be removed. The immutable attachment of these blocks assures a user that none of the information inside the blocks has been tampered with. 

Remember the box analogy from earlier? Imagine those boxes being welded together as each is filled. The attachment between them makes it physically impossible to remove one from the sequence to change its contents.

It’s not a perfect metaphor. After all, the digital block contents are still visible to network users (while physical ledgers in a metal box wouldn’t be accessible at all). 

If all of that still sounds too confusing, that’s totally okay. The point is that blockchain technology seals transaction history in un-editable chunks, and strings those chunks together in a way that makes editing one chunk or transaction without affecting the whole chain impossible.

That was a lot of information! But now we’ve put down the basics of crypto, Bitcoin, and blockchain technology. So let’s get right into how to bet with Bitcoins.

How to Bet With Bitcoins

Chances are you’ve seen people all over the internet sing the praises of betting with Bitcoins. We’ll get to the benefits, but first, we’ll go over how exactly to do it. 

Step 1: Set Up a Cryptocurrency Wallet

Before you purchase crypto, you need a safe place to store it. Many crypto exchange platforms offer online wallet services. You’ll need a wallet to secure your Bitcoins.

With platforms like Coinbase and Nexo for example, you can choose to store your crypto online, by the exchange itself. Most, if not all, online wallet services are free of charge. 

Other exchanges (like Bitstamp, our top pick), don’t offer wallet services. This means you need to have a secure wallet ready before making your first purchase. 

You’ll find many different recommendations for crypto storage, depending on how privacy-oriented you are. Some recommend going with an online wallet for convenience.

Others prefer to keep their coin in “cold storage.” This refers to entirely analog solutions (like printing your private key on a piece of paper and locking it in a safe). Each type has its own pros and cons.

We’d recommend a Ledger Wallet because it bridges the gap between cold storage and digital storage. It’s a physical hardware device that’s separate from your phone or computer, making it much harder for someone to hack and steal your private key.

Step 2: Purchase Bitcoin

After deciding which wallet is right for your needs, you need to purchase Bitcoins (or shares in coins) from an exchange.

There are many good options when it comes to online crypto exchanges. This means you can easily pick one that meets your specific needs — whether you’re a new investor or an experienced trader.

Each platform will have slightly different instructions for getting set up and funding your account, but basically, you’ll:

  • Register with the exchange platform with a working email address
  • Deposit fiat funds (USD, EU, etc.) into your exchange account
  • Use those fiat funds to purchase parts or whole coins

Your payment method — credit, debit, and so on —  may be regulated depending on your location. Please look up the laws in your country or province before funding your account.

Do I Need A Ton Of Money to Buy Crypto?

Usually no. Reference the “getting started” instructions on your exchange of choice, but most platforms let you get started with any deposit amount. 

Whether you’re depositing $10 or $100, you’ll be able to use whatever funds you choose to purchase crypto. For expensive currencies, you’ll be able to buy a small fraction of a coin rather than a whole coin.

Keep in mind when you get started that it may take a few days for your fiat funds to be credited to your exchange account. Check with your exchange’s “getting started” instructions for specific timeframes.

Our Favorite Crypto Exchanges

Of course, we’re not going to leave you without recommendations. These are our preferred exchanges for purchasing Bitcoins and other cryptocurrencies.

Bitstamp

Bitstamp is our top pick, for a few reasons. The biggest reason is that it’s been around since 2011, following right after the invention of Bitcoin. So it’s existed almost as long as Bitcoin itself.

It’s also got 24/7 support and an easy-to-use mobile app, which are both great for new crypto buyers and betters.

Coinbase

Coinbase is a popular choice, and for good reason. It has its own crypto wallet service, for those not ready to dive into a hardware wallet or cold storage. 

Coinbase also offers bonuses for first-time signups and learning about cryptocurrency, which is attractive for new investors.

Binance

Binance boasts over 100 cryptocurrencies. It’s another great exchange platform, with a suite of tools for both beginning and advanced traders.

It also has full mobile functionality across all devices.

Nexo

Nexo’s exchange functions much like the other two described above. It not only includes a full range of mobile apps but also allows crypto borrowing for those interested. 

Step 3: Check Your Gambling Legislation

At this point, you’ve got the coin and the wallet. You’re now ready to find a betting exchange and place bets!

But first, you need to find out if you CAN bet in your state, province, or country. Regulation is starting to catch up to crypto, especially when it comes to online and offshore gambling.

Many betting sites will immediately show a pop-up if you’re visiting from a region they cannot serve. Make sure to check your local laws before placing any bets or withdrawing winnings.

If betting with crypto is allowed in your area of residence, great! Also, make sure you’re familiar with taxation laws around gambling winnings.

Tax laws are also starting to catch up to crypto, especially around cashing out winnings. 

Step 4: Choose A Betting Exchange

Sports betting might be your thing. Or it could be online cards or casino games. No matter what your game of choice is, there’s definitely an online betting exchange that will support it.

Our picks all accept Bitcoin! Some also accept funding in fiat currency, but others take only crypto.

Our Favorite Bitcoin Sportsbooks

Again, we’ve got a list of our favorite Bitcoin-accepting online betting exchanges. If you need more options, check out our full list of online betting sites.

Cloudbet

Cloudbet is a fully crypto betting platform. It supports a range of cryptocurrencies, not just Bitcoin. Their available games include cards, sports betting, and standard casino games.

Plus, they include a welcome bonus of up to 5 Bitcoin at the time of writing.

Nitrobetting

Nitrobetting is another fully crypto option. However, Nitrobetting ONLY accepts Bitcoin. So if you’re looking at Ethereum or Dogecoin, you’re out of luck.

They place a heavy emphasis on privacy (personal data isn’t required to place bets) and have multiple signup bonus options by game type or sport.

Sportsbet

Sportsbet is a hybrid crypto betting platform, accepting both crypto and fiat currency. If you’re looking for a place for sports betting in Bitcoins, look no further. 

They boast a slightly smaller lineup of sports and esports for wagers, but also have 24/7 support available.

BetUs

BetUs has been around for a long time and is a trusted name because of it. Their platform has a variety of games but places a heavy emphasis on sports betting.

BetUs also accepts both crypto and fiat. They also have first-time signup and crypto-related bonuses available.

Step 5: Deposit Bitcoins Into an Online Book

Once you’ve chosen an exchange, set up an account following the platform’s instructions. Each online betting site will have their own directions for connecting your crypto wallet and getting started.

Usually, it will look like “sending” Bitcoin or another cryptocurrency from your secure wallet to your account on the betting site. You’ll need to use your private key to do this.

Once your Bitcoins are deposited in your betting account, they’re ready to use.

Make sure you read the instructions on your bet exchange site for more detail, and thoroughly follow them.

Step 6: Lay Your Bets

It’s the moment you’ve been waiting for — time to lay your bets. 

We won’t go into detail here about the type of online sports bets you can make online. It really depends on personal preference. Plus, if you’re reading this, you probably have some idea already.

The only practical difference with Bitcoin or crypto here is the funding type being wagered. Instead of fiat money you’ve deposited into your account, you’re wagering with Bitcoins (or fractions of them). 

If you ever get confused about the fiat value of your coinage, many betting sites will allow you to toggle between the crypto value and the fiat value. So when you play, you can be certain of the amount you’re putting on the table. 

So go ahead and place your bets responsibly!

Step 7: Withdraw Winnings

Hopefully, you win your bets! In this case, you’ll want to cash out and withdraw your winnings at some point. Here’s how you do it.

Like with deposits, withdrawal instructions will vary slightly depending on the betting platform you chose to use. So reference their instructions first and follow them closely.

Some platforms have minimum play limits before you can cash out with crypto, especially if you’ve used a sign-up bonus. Check the fine print on your bonus offer as well as the withdrawal or cash-out terms on your betting platform before trying a transaction.

At its core, withdrawing winnings will go something like this:

  • Specify the funds you want to withdraw
  • Withdraw funds from your account on the betting exchange
  • Enter any needed identifying information (such as your private key)
  • Wait for your crypto to arrive in your wallet

Once your transaction is confirmed, your funds should be credited to your wallet. However, time estimates on how long this takes can vary, so check with your betting platform and wallet providers.

Remember: Know Your Tax Laws!

We touched on this earlier, but it deserves repeating. Make sure you’re very familiar with your country’s laws.

Tax legislation around cryptocurrency — and specifically gambling with cryptocurrency — is still evolving in many places. Please ensure you’re complying with any regulations.

 Step 8: Repeat

That’s the process! Again, specific instructions for deposits and withdrawals will vary slightly depending on which platform(s) you use. 

But they’ll all follow the process outlined above. Remember, play responsibly. 

Benefits of Betting with Bitcoins

Now that we’ve gone over the how-to, let’s get into the “why.” What’s the benefit of betting with Bitcoin or cryptocurrency over fiat funds? We can name several:

Security

Cryptocurrency is often said to be more secure than typical banking. After all, there’s no third-party information shared with a bank or financial institution.

The coins go directly from you to where you send them, in transactions that are thoroughly documented.

Anonymity

Another prized benefit of betting with Bitcoin or other crypto is anonymity. Use of personal identifying information beyond your wallet keys isn’t always required.

In many cases, a verified and working email address is enough. If you value your online and financial privacy, crypto bets are definitely worth looking into.

It’s important to note here that your crypto transactions are still visible on the public blockchain. However, that record does not contain any personally identifying information about you (apart from, at most, your public key).

Higher Bet Limits

For those of us lucky enough to be high rollers, this is a biggie.

Many bet exchanges have no limit, or a substantially higher limit, to bets placed with cryptocurrency. On the other hand, there tend to be lower maximums for bets placed with fiat currency.

If high bets are your preferred way to play, then funding accounts with crypto is definitely worth considering.

Low Fees

This will vary depending on the betting exchange you use. But in general, the fees associated with betting in Bitcoin or crypto are much lower relative to bets made in faith currency.

For example, a site may have a flat fee for Bitcoin withdrawal, versus a percentage withdrawal fee for fiat. With low sums, that’s not a lot. But when you start getting into larger withdrawals, percentage fees can take a huge chunk out of your winnings.

Say a site charges a $5 withdrawal fee for crypto winnings and a 5% fee for fiat. If you’re withdrawing $1000 worth of winnings from a betting exchange, you’ll take home more if you bet in crypto ($995 in this example) versus fiat ($950).

Bonuses

Many online bet exchanges offer frequent promotions and sign-up bonuses. These can be anything from deposit matching in cryptocurrency to a percentage bonus based on your bets. Either way, a competitive bonus can extend your time playing.

We outlined a few notable bonuses in our list above, but you can find even more in the updated resources at Underdog Chance.

These will vary by provider — some offer bonuses attached to first-time crypto betters only, or for specific types of games.

If you’re a first-time crypto better, we definitely recommend shopping around the platforms to see where the best deals are.

Deposit & Withdrawal Speed

Many betters prefer funding their accounts with crypto because of its shorter transaction speeds. 

With fiat cash, transactions have to run through a third-party financial institution. Because of this, they can be quite long, ranging from 5-7 or even 5-10 business days.

With Bitcoin and other cryptocurrencies, the transactions take only as long as the blockchain computations need to verify the transaction. This can take as little as a few hours. 

Not Subject to Inflation

This benefit is specifically tied to Bitcoin, and may not apply to other cryptocurrencies. 

An important value factor of Bitcoin is that it is capped in volume. There can only be a certain number of Bitcoin issued, ever.

Remember that there is no “Bitcoin bank” or other centralized authority managing the currency. This means that there is no possibility of someone issuing more Bitcoins, which would  bring down their overall value. 

Now its value can decrease for other market-related reasons. However, inflation isn’t a huge concern.

Get Started Placing Bets With Crypto

Now, you have all the information you need on how to bet with Bitcoins.

If you’re feeling lucky, get set up with a wallet, some coins, and an online betting exchange. But if you need a little more guidance, check out Underdog Chance. We have a  huge library of free resources — including an online betting class — for new and experienced betters alike.

Happy playing!