European Gaming Lawyer magazine Spring 2016 | Page 15

One would say bitcoins are a
“cryptocurrency”, i.e. an electronically
created currency which only exists in
the virtual world, does not have physical
presence and is run on an open, peer-topeer software. Unlike traditional bank
transactions cryptocurrencies do not require
a central payments processor or bank.
They therefore not only allow for prompt,
immediate (international) transactions but
also avoid the transaction fees which banks
would usually charge.
One would to explain that Bitcoins can
be “mined”, i.e. created, by users solving
CPU-intensive cryptographic tasks and
that the bitcoins created through mining
are then transferred to a so-called “wallet”
where the addresses and keys necessary
f