Crypto-currency it’s called. That is to say, bitcoin is a digital currency with its transfer and creation designed around cryptography. Bitcoin started in 2009 and has since had a particularly volatile time on the market. Bitcoin is a currency that can be mined through the use your computer’s processing power and can be spent on goods and services.

Bitcoin is not widely accepted just yet, however the low (sometimes free) transaction costs have appealed to almost every consumer. Due to the anonymity of all bitcoin transactions and the inherent lack of barriers to trade, bitcoin is a top choice for gamblers in the US. Currently depositing in online poker sites from the US is banned, but with bitcoin the area becomes increasingly grey. A player could deposit in a bitcoin poker client without being traced through a highly secure and encrypt transaction – this makes bitcoin ideal for anyone looking to play poker and a number of bitcoin poker sites have been set up due to this demand.

So what’s the downside to bitcoins and gambling with bitcoins?

Well there are possible legal issues. Although it’s not clear just what law you would be breaking, it is unlikely to be received well by the US government. Of course, outside of the US it is perfectly legal to play poker or gamble with bitcoins.

Another issue is the volatility of the bitcoin price. While you’re dealing with the natural variance of gambling and poker, you will also find that the variance of bitcoins adds to the swings. In fact, in 2011 the price of a bitcoin started at less than $1, rose to almost $30 and then finished the year at around $3… it’s not quite got the stability of a dollar or pound sterling just yet.