Bitcoin, the virtual currency that to many has seemed like something reserved for techies and 20-somethings who spend their lives in the deepest recesses of the internet, is already accepted at a few online poker rooms, such as SealswithClubs.com. On Wednesday, it will make its first move out of the online gambling world and into brick-and-mortar casinos as both the Golden Gate Hotel & Casino and the D Las Vegas Casino Hotel will begin accepting Bitcoin.
Both casinos are owned by brothers Derek and Greg Stevens (the two own the D completely and are majority owners of Golden Gate) and are both located on the Fremont Street Experience in downtown Las Vegas.
In a press release, Derek Stevens expressed his excitement saying, “I’m proud that the D and Golden Gate will be the first casino properties to accept Bitcoin. We’re located in the growing high-tech sector of downtown Las Vegas, and like all things downtown, we’re quickly adaptive to new technology. The timing is right for us to launch this initiative, and I’m happy to be able to offer this to our customers.”
Stevens said that there had been some internal discussions about the possibility of accepting Bitcoin, but the real catalyst to the decision was a simple one: customer requests. Once a few guests personally asked Stevens to implement Bitcoin payments, he got the ball rolling.
Before anyone gets too excited, keep in mind that Bitcoin will not be accepted at gaming tables or machines. It will be accepted at five locations: the front desks of both hotels, the gift shop at the D, and two restaurants at the D, American Coney Island and Joe Vicari’s Andiamo Italian Steakhouse. BitPay will process all Bitcoin payments via tablets installed at each cashier.
Bitcoin is a virtual currency not backed by any government or central banking authority. All Bitcoin are transferred through a peer-to-peer network where all transactions and balances are also logged. No account information is stored on a central server; everything is done on individual client computers.
Bitcoin are created via Bitcoin mining using software on individual computers. The software uses the resources of the computer’s CPU and GPU to keep the network up and running, doing things like verifying transactions. Every so often, a new Bitcoin is created on one of the computers running the client software, essentially as a reward for using its processing cycles. Typically, because it takes extreme amounts of processing power to produce a single Bitcoin, mining has become the realm of people and companies who set up dozens of powerful computers whose sole purpose to mine for Bitcoin.
Bitcoin mining will not go on forever – the system is limited to 21 million Bitcoin. Thus, no inflation.
Though most people will never produce a Bitcoin themselves, Bitcoin can still be acquired via a Bitcoin exchange, such as mtgox.com. Similar to a stock exchange or other currency exchange, people who hold Bitcoin put them up for sale for real currency. Lately, Bitcoin investing has been a bit of a risky proposition, as the Bitcoin price has fluctuated wildly. To illustrate, in July 2013, one Bitcoin went for about $100 on mtgox. This increased to $200 in October and then, spurred on partially by a positive reception for Bitcoin in a Congressional hearing, the price of one Bitcoin soared to over $1,200 in early December. It dropped down to under $600 in the middle of the month and is now back up to the upper $900’s.