Vancouver hosts Bitcoin’s ATM coming out party
For as long as there have been ATMs, the one constant has been the currency that comes out them: dollars. As of today, add a new currency to the mix as the world’s first-ever bitcoin-enabled bank machine goes live in Vancouver.
The machine is the first of five planned across Canada by Nevada-based Robocoin and Bitcoiniacs, a Vancouver bitcoin trading company, and it will allow customers to convert Canadian dollars into online bitcoins. After authenticating themselves through a palm scan, they will be able to buy or sell up to a maximum of C$3,000 each business day.
The ATM represents another tangible step toward bitcoin legitimacy, and is the latest in a year of firsts, including the first real estate listing. Earlier this year, an Edmonton coffee chain began accepting bitcoins. The Canadian Virtual Exchange has traded over $29 million in the currency thus far, the Quebec-based Bitcoin Catalog, the world’s first, publishes its second edition next month, and Montreal’s non-profit Bitcoin Embassy has become an advocate for adoption across the country.
The appeal of an alternative digital currency in an increasingly digital economy lies in its fluidity: unlike conventional currency, bictoins can be transferred directly from person to person online, with no need for bank or clearing house involvement, thus resulting in lower fees. Bitcoins are not subject to oversight by central banks or any other regulatory agency – which has raised their profile in crisis-hit European economies, as citizens seek safe haven from governments slashing conventional bank deposits. Because they use encryption they are more difficult to track than conventional currency.
This has fuelled a rise in bitcoin’s use by individuals and groups who don’t necessarily want to be found, which in turn has contributed to bitcoin’s reputation in some circles as a sketchy alternative to legitimate currency. When the FBI shut down the Silk Road Internet marketplace earlier this month, it seized 144,000 bitcoins, worth an estimated US$28.5 million, from Ross Ulbricht, the alleged operator of the site.
The FBI alleges Ulbricht, who’s been arrested on suspicion of building and maintaining the site where some of its 900,000 registered users were suspected of dealing drugs, buying and selling weapons and arranging murders-for-hire, made upwards of $20,000 in bitcoin commissions every day, and held the largest bitcoin balance of any Silk Road user – an estimated $3.4 million in total.
Not so fast
Despite bitcoin’s online-commerce friendliness, the road to adoption isn’t completely obstacle-free. The amount of bitcoins available globally is deliberately capped at 21 million, and its value can vary based on supply and demand. Just like a volatile stock, this can drive significant fluctuations, with intra-day swings of upwards of 30 per cent. It is not backed up by a bank or central government-guaranteed reserve, which raises its speculative nature. And for the tax-savvy, the Canada Revenue Agency confirmed earlier this year that bitcoin transactions are subject to Canadian tax law just like any other currency.
In an interview with CNBC, software developer John McAfee said in a world of easily-reproduced, hard-to-value digital data, conventional transactions need to be rethought.
“Another paradigm is necessary. I do not expect to get paid the same way that I got paid 30 years ago,” he said. “You cannot stop things like bitcoin. It’s like trying to stop gunpowder.”
Bitcoin may be emerging as the first widely accepted democratic, programmable currency designed for an increasingly online economy. But just because it’s now accessible through an ATM doesn’t mean consumers will be switching over in droves anytime soon. Feel free to dabble in bitcoin, but don’t give up those loonies just yet.
Carmi Levy is a London, Ont.-based independent technology analyst and journalist. The opinions expressed are his own. firstname.lastname@example.org