smartphone with the bitcoin logo and bitcoins stacked up around

Is it Possible for the Average Person to Understand Bitcoins?

In fact, it is possible for the average person to understand bitcoin but it does take some perseverance and imagination.  To this end, we are starting a series on bitcoin.  In the last few years, Jackpot Capital online casino began accepting bitcoin for deposits and withdrawals. 

Most gamers still use credit and debit cards or ewallets to enable themselves to play our jackpot slots and to take back winnings.  But we started accepting bitcoin at Jackpot Capital casino because there was a significant upsell in demand from gamers!  Now, many other gamers are aware that we accept bitcoin for deposits and withdrawals and they want to understand why.

What is Bitcoin

We can say that bitcoin is a cryptocurrency but that doesn’t really clear up the air, does it.  What exactly is a cryptocurrency or a crypto-anything for that matter?  Let us call bitcoin alternative money.  This leads us to the next question which is actually a kind of backtracking question.

What is Money?

Economists call money a medium of exchange.  In layman’s terms this means that people can use money to buy and sell goods and services.  If there are two people involved in an exchange and they both agree on the same medium of exchange, then that becomes money.

Cigarettes were money for a short period of time during World War II because there was a shortage of cigarettes.  Today, because so many people are hoarding toilet paper, people are jokingly referring to it as the modern form of money during this crisis.

Anything can be money if the people buying and selling agree.  However, money has usually had two characteristics.  It has to be relatively scarce and it has to be very stable in itself.  Tomatoes might be relatively scarce compared to sand but they are not stable.  After a couple of days tomatoes lose a lot of their value.

Sand, on the other hand, is quite stable but it is far from scarce.

Therefore, on most countries, gold and silver have been money.  Paper currencies and coins have represented gold and silver and could be redeemed for actual gold or silver.  In fact, coins were at one time made of either gold or silver.

Nowadays, no country backs its currency with gold or silver and coins are made of less valuable metals.  Money, therefore, today is just promises from governments.

How Much Do You Trust Governments?

Most people trust government at least regarding money.  They feel that as long as everyone accepts dollars, then dollars don’t have to be backed by gold or silver.  There are, however, a growing number of people who see government money as just something that passes in the air.  Without backing by “hard” currency, these people feel, government money will eventually be replaced by a new type of money.

This new type of money is still being called cryptocurrency because it is seen as fake currency.  In the end, bitcoins might disappear and dollars will remain.  In the end, dollars might disappear and bitcoins will remain.  More likely, both will endure and be accepted as money.

We have reached the point in our discussion where we have to explain what bitcoins are.  We all know more or less, what dollars or Euro are since they represent the way people have done business for millennia.  Bitcoin users claim that bitcoins are as stable as or more stable than traditional currencies. 

Jackpot Capital casino accepts bitcoin so now we will try to explain how we understand this alternative currency.

Legal Tender is not Actually Money

The paper bills we generally call money may say the term “legal tender” in the language of the country that prints the bills.  Legal tender actually means that it is illegal in these countries to refuse these bills as payment for a good or product.

Bitcoins are not legal tender in this sense since it is still okay not to accept them for payments.  But that doesn’t mean that it is illegal to use bitcoins.

Digital Money

In the computer age, most money is digital.  That means that there is no actual physical entity that we can touch and call money at least for most of the money now in circulation in the world.

This may seem odd to people who feel that they have a lot of money if they have two hundred dollars in their wallet.  The world, however, deals in trillions of dollars and for those sums the only way to manage transactions is digitally.

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Centralization and Scarcity

Since governments now promised to back their currencies with promises, money became more and more centralized in every country.  Also, paper money became less and less scarce since governments could print as much as they wanted to print.  Bitcoins were created to do two things: to decentralize the creation and control of bitcoin currencies and to limit the amount of bitcoins in circulation.

Centralization of currency control can lead to corruption, over-production of currencies, and loss of control of individuals over their own money.  Anyone who has ever had a run in with a bank over fees and anything related to their account understands the danger of corruption in a centralized money system. 

Many countries have had and still have wild inflation because the governments simply created too much money.  Finally, people want to have as much control over their money as possible.

In the great classic movie, The Treasure of the Sierra Madre, the three intrepid gold prospectors didn’t trust any one of them to watch the gold they were mining so they divided the gold every evening and each one hid this gold.  Even though this decentralization of money failed in the end, most people want to retain as much control as possible over their own money.

The Double Spend Problem and the Blockchain

Since so much money is digital, there is an obvious question: How do we prevent someone or a small group of people from simply creating accounts?  This has happened! 

In later articles we will deal at length with this problem and with a further discussion of how bitcoin works and what exactly is the blockchain that so confuses people.

Jackpot Capital and Bitcoin

We accept bitcoin for deposits and withdrawals because many of our gamers requested that we do so.  We are totally apolitical with regard to bitcoin in the same way that we are apolitical in regard to any currency.

If you wish to use bitcoin, we welcome you to the Jackpot Capital family and if you prefer to make deposits and withdrawals in more “traditional” ways we welcome you, too!  By the way, credit cards came into widespread use only in the last fifty years! 

Ewallets are even younger than credit cards.  So, when we talk about traditional methods of depositing and withdrawing we really mean doing these transactions with “money” that most people understand.

We will continue this series of articles on bitcoin for as long as needed.

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