Alternative Currency Goes Mainstream As Bitcoin ATMs Emerge

Tyler Durden's picture




 

Submitted by Michael Krieger of Liberty Blitzkrieg blog,

The Bitcoin ATM has Arrived... Here’s How it Works

The more I learn about Bitcoin, the more I support it.  In fact, the only donations we accept on this site are Bitcoin donations.  As I mentioned in a post late last summer, I think it represents another way to fight back against the current repressive and immoral monetary system that has a strangle hold on the planet.  Ever since WordPress.com (the extremely popular blogging platform and 22nd most popular site on the internet), decided to accept Bitcoin as payment last November the value of Bitcoins versus the U.S. dollar has more than doubled.

BitcoinChart

The esoteric crypto-currency continues to gain popularity and technologies to make it even more user friendly are popping up all over the place.  The latest is the Bitcoin ATM, which could be a serious game changer for adoption.  From CNET:

NASHUA, N.H. — Zach Harvey has an ambitious plan to accelerate adoption of the Internet’s favorite alternative currency: installing in thousands of bars, restaurants, and grocery stores ATMs that will let you buy Bitcoins anonymously.

 

It’s the opposite of a traditional automated teller that dispenses currency. Instead, these Bitcoin ATMs will accept dollar bills — using the same validation mechanism as vending machines — and instantly convert the amount to Bitcoins and deposit the result in your account.

 

Harvey and Matt Whitlock are partners in a New Hampshire-based venture, Lamassu Bitcoin Advisors, that’s hoping to commercialize the ATM by selling to retail businesses, especially ones that also want to accept the decentralized alternative currency from customers.

 

Unlike modern currency, which can be brought into existence at the whim of politicians or a central bank, leading to each note being devalued, the number of Bitcoins is governed by predictable mathematical algorithms. That’s made Bitcoin popular among libertarians and other activists skeptical of the Federal Reserve; the Free State Project accepts payment for its summer festival in Bitcoins, for instance. (The U.S. dollar has lost 96 percent of its value over the last century because of cumulative year-over-year inflation, according to federal government data.)

 

To obtain Bitcoins, people use an iPhone app like Blockchain or Android‘s BitcoinSpinner to show the ATM a QR code with their desired address for payments. After they insert a dollar bill (denominations up to $100 are accepted), the ATM automatically credits their Bitcoin account with the proceeds. There’s a 1 percent transaction fee.

Just awesome.  Great work guys!

Full article here.

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Tue, 02/26/2013 - 16:28 | 3278937 Tsunami Wave
Tsunami Wave's picture

As nice as it sounds, no thanks.

Tue, 02/26/2013 - 16:33 | 3278955 McMolotov
McMolotov's picture

I admit I don't fully understand bitcoin, but I'm 100% behind anything that makes the owners of the current system nervous. Competing currencies are probably near the top of that list.

Tue, 02/26/2013 - 16:38 | 3278983 MillionDollarBonus_
MillionDollarBonus_'s picture

Here are some fundamental questions that bitcoinbugs need to answer if they want to retain a semblance of credibility:

  1. How can people be expected to put all their faith in digital entities that they cannot see or touch? 
  2. What if all computers running bitcoin crash at the same time? (sure, it’s not likely .. but it’s still a risk)
  3. What if a group of hackers hack into your bitcoin wallet?
  4. What if the computer code breaks?

These are some of the fundamental objections that people have toward bitcoins. And untill they are addressed, people will continue to view bitcoingbugs as weird nerdy creeps with childish dreams of a digital utopia.

Tue, 02/26/2013 - 21:15 | 3280006 Jack Napier
Jack Napier's picture

Q. How can people be expected to put all their faith in digital entities that they cannot see or touch?
A. They don't have to. There is a predictable algorithm programmed for deflation. Faith is only needed when you don't understand something.

Q. What if all computers running bitcoin crash at the same time? (sure, it’s not likely .. but it’s still a risk)
A. Then nobody would be using BitCoin. It certainly has drawbacks in that you must have Internet access and electricity to make use of the protocol, but your scenario is far less likely than the Internet itself going down.

Q. What if a group of hackers hack into your bitcoin wallet?
A. You should have password protected it and kept it hidden instead of leaving it in a publicly available space or with an online exchange.

Q. What if the computer code breaks?
A. Then a superior version will emerge to replace it with BitCoin 2.0 or ByteCoin or MegaCoin.

 

BitCoin is not a good store of wealth. It is not a safe haven, but it is immune to monetary policy manipulation since its design was hard coded at its inception. What BitCoin truly is is the ultimate real time global currency that circumvents the establishment. It is also the only free market in existence.

Tue, 02/26/2013 - 22:00 | 3280234 Matt
Matt's picture

1. I think they mean putting your trust in the developers and mining pool operators, who control the development of bitcoin, and control transaction processing.

2. Sweden is going cashless with their normal money, places like that will have the same problems as bitcoin

3. Money that is inaccessible is pretty useless. If you toss your gold into a lake, it is safer, but how can you buy stuff with it? Hopefully secure, portable cards or some other implementation makes bitcoins or a successor cryptocurrency more functional while secure.

As a currency designed to have it's money supply increase at a decreasing speed until no new coins are mined, while other currencies increase in supply at ever accelerating rates, it should be a store of wealth.

Tue, 02/26/2013 - 22:47 | 3280433 malek
malek's picture

Q. What if the computer code breaks?
A. Then a superior version will emerge to replace it with BitCoin 2.0 or ByteCoin or MegaCoin.

That's a good one!
I especially like the comparison with the current US Dollar:

What if the US Dollar breaks?
Then a "superior" version will emerge to replace it!

Nothing to worry about, except for the tiny nuisance that all your old ones will expire worthless.

Tue, 02/26/2013 - 23:49 | 3280668 Half_A_Billion_...
Half_A_Billion_Hollow_Points's picture

 

 

The difference is that in bitcoin the blockchain is preserved and your bitcoins will be there after the update.

Tue, 02/26/2013 - 23:57 | 3280686 CompassionateFascist
CompassionateFascist's picture

bitcoin depends on the 'net and the Grid. When they go, it goes. 

Wed, 02/27/2013 - 05:03 | 3281036 gold-is-not-dead
gold-is-not-dead's picture

internet will never go away, just like the wheel never went away, or the pipes... some progress in society is irreversible by nature...

Tue, 02/26/2013 - 16:41 | 3279014 Ahmeexnal
Ahmeexnal's picture

BitCoin, brought to you by the same power elite who own the money printing industry.
Can you PHYSICALLY HOLD BITCOINS IN YOUR HAND?

Tue, 02/26/2013 - 17:04 | 3279143 overqualified
overqualified's picture

It's open source and completely transparent (both code and operations). It would be stupid for the elite to serve such a tool to the unwashed masses.

Yes, You Can! Just printing a Bitcoin wallet (public + private keys).

Tue, 02/26/2013 - 19:21 | 3279665 thisandthat
thisandthat's picture

What gold detractors fail (or pretend not) to understand is that gold requires no social infrastructures to function as a currency, whatsoever. Period. You mine/dig it and from then on it needs nothing more to function as currency than trading partners - no banking system, no regulating powers, no state even; it's a self-sufficient, extra resilient currency in that, and that's the reason why it survived this long.

The thing with bitcoin, otoh, is it's lack of resilience, which is on the opposite side of infrastructure dependency scale: it needs even more layers of infrastructures than paper money - it also needs a functional electronic communications infrastructure; no power and things soon start falling apart, as the only possible way to trade would be credit (assuming people would just trust your hashes to be legit); a more serious event (solar emp burst), and any non hardened electronics could go bust, and everything contained or depending on them with it.

That's the liability with bitcoin (and other dematerialized goods) - when the infrastructure is fine, you're fine; when it goes bust, so may you.

Tue, 02/26/2013 - 19:22 | 3279713 Againstthelie
Againstthelie's picture

I think it's absolutely shocking, that people who support precious metals do not recognize the difference between the PMs as money because of their intrinsic value and the need for an authority in the case of a money that is built on trust! Who are the bigger sheeple?

Wed, 02/27/2013 - 01:28 | 3280854 thisandthat
thisandthat's picture

Such authority only exists while conditions for its exertion exist; once those can't be met, trust based money is toast... and bitcoins go first, for the reasons mentioned. Simple as that.

Tue, 02/26/2013 - 22:08 | 3280266 Matt
Matt's picture

The problem with gold is that it has such a high relative value, that you would need to use grains of gold or milligram units of powder, and then everyone would need tools on hand to verify that the gold is real and pure all of the time.

With something so valuable in a powder or grain state, losing money just from opening and closing your wallet becomes a real issue.

Alternatively, you could have multiple coins, such as nickel, silver and gold, but the face value would need to be the weight of the coin; if you try to have a fixed numerical ratio between coins, people will game the system, taking payment in whichever metal is undervalued.

Further, you would need to never ever go to war, or you would need to run perpetual government surpluses in order to have a stockpile of money on hand in order to go to war.

Wed, 02/27/2013 - 01:38 | 3280879 thisandthat
thisandthat's picture

If none of those conditions were ever impeding factors, in worse times than today's (and when gold was, relatively speaking, as much, if not more valuable than today), then it wouldn't be now that would happen.

Wed, 02/27/2013 - 02:10 | 3280910 Matt
Matt's picture

When was the last time people actually used physical gold as money? I mean not paper backed by gold, not fractionally reserved gold stored at gold banks, not coins that were diluted gold. I supposed San Francisco Gold Rush is the last time people (outside Zimbabwe or other hyperinflations) used gold dust as money. I don't think it has really been done successfully on a large scale.

Wed, 02/27/2013 - 03:52 | 3280982 awakening
awakening's picture

Down here that would have been the last Gold Rush (1850s Australia), it was more convenient at the time given the prevalence of the metal in those days =)

Wed, 02/27/2013 - 14:47 | 3282570 thisandthat
thisandthat's picture

Depending on your timescale that's either too long ago or almost just yesterday. But ever went to Vietnam?

Tue, 02/26/2013 - 17:05 | 3279148 digitalhermit
digitalhermit's picture

Yes, they do come in a physical bearer form: https://www.casascius.com/

Tue, 02/26/2013 - 17:06 | 3279155 long-shorty
long-shorty's picture

You can't even eat these Bitcoins!

Tue, 02/26/2013 - 17:20 | 3279229 unrulian
unrulian's picture

....E...M...P.....

Tue, 02/26/2013 - 17:55 | 3279398 espirit
espirit's picture

Friendly algorithms my ass.  They ain't my stinkin' friend.

Tue, 02/26/2013 - 18:24 | 3279529 zaphod
zaphod's picture

I knew it, MDB is totally into BTC too!

Tue, 02/26/2013 - 18:25 | 3279535 NoDebt
NoDebt's picture

I just got a vision of Ben Bernanke stabbing a BitCoin voodoo doll repeatedly with a long needle while screaming over and over "WHY WON'T YOU DIE?!  WHY WON'T YOU DIE?!"

Tue, 02/26/2013 - 20:55 | 3280030 Haole
Haole's picture

People will have a hell of a lot more to worry about than not being able to transact in Bitcoin on the internet if the entire grid goes down, don't you think?

Tue, 02/26/2013 - 21:21 | 3280102 Crash Overide
Crash Overide's picture

Can anyone tell me how I can use bitcoins at the farmers market when there is no power and internet?

Would you rather have an algo in your pocket or silver?

Tue, 02/26/2013 - 21:35 | 3280146 Haole
Haole's picture

You can buy both silver and food (among other tangibles) with bitcoin if you know where to go.

Tue, 02/26/2013 - 21:43 | 3280167 Half_A_Billion_...
Half_A_Billion_Hollow_Points's picture

 

 

 

Can you tell me how to cross a border with 10 million USDs with gold or silver?  'Cause I can do that with bitcoin easily.

 

These are complementary tools.  Bitcoin is a friend of gold/silver.  PMs will never lose value--we all know that.  But to deny that Bitcoin has a place in monetary competition is to put yout head in the sand.  And the best thing about Bitcoin?  Scarcity!  Less than 1400 people can buy 1000 bitcoin created in 2013--in the entire planet!  

 

If you think it's not going up, fine.  If you think it's not money, fine.  But prepare to be surprised as thousands of people try to buy more than 1000 bitcoin this year. 

 

The bubble is about to begin (it has only gone from 13 to 31 in the last months).

Tue, 02/26/2013 - 22:26 | 3280342 XenoFrog
XenoFrog's picture

How do you easily convert $10 million in bitcoins back into something else? It's easy. First you go to an exchange and crash it when you dump your coins. In the resulting aftermath of the smackdown, you can start drawing out your assets at $10-50 a day. In a few short millenia, BAM, you have your money in your currency type of choice.

"The bubble is about to begin (it has only gone from 13 to 31 in the last months)."

And last year it went from $29 to $5 in a few days. 

 

Remember, get in early so that you can get rich quick!*

 

*Absolutely not a get rich quick scheme. Promise.

Wed, 02/27/2013 - 04:32 | 3280997 Bangers
Bangers's picture

Most of the Bitcoins I buy are face to face. I have found sellers via localbitcoins.com and met them in a coffee shop with cash and exchanged them then and there. Waited a few mins for a blockchain confirmation and walked away with my coins. That's on a relatively small scale but it is likely that there will be broking services that evolve for larger numbers off-exchange - just how it works with physical gold. If larger sums are required then brokers will go straight to the supply and sell on behalf of miners.

 

Re: the price swings, that bubble in 2011 happened in when there was a much smaller user base and much less Bitcoin infrastructure. Much work has happened since then and the user base has grown although still relatively small. Take a look at a silver chart in 2011 and tell me how much better that was? 50 bucks down to 32 buck in a couple of weeks. And how long has silver been around?

Not sure if you've noticed but markets fluctuate.

I'm sure you may have not realised that a digital protocol that completely freed up the exchange of information would turn out to change the world back in the early 90's. I didn't. Maybe Bitcoin will die an early death but, altenatively, a digital protocol that completely frees up the exchange of value may, in time, prove to be just as revolutionary.

Tue, 02/26/2013 - 22:52 | 3280453 Crash Overide
Crash Overide's picture

Digital currencies be it Bitcoin or a FED computer are just 1's and 0's right?

What am I missing, faith?

 

PS, I don't even like money.

Tue, 02/26/2013 - 21:24 | 3280109 batz
batz's picture

 

Not to dump links but there is a game changer for bitcoin, which is using it in casinos. It's a source of infinite liquidity that would make it compete with "fiat."

http://asportinginterest.blogspot.ca/2013/02/bitcoin-liquidity-revisited...

 

 

 

 

Tue, 02/26/2013 - 22:15 | 3280299 Matt
Matt's picture

Satoshi Dice has been running for a very long time; the author must not have done any research. The casino has no risk; it has no float. Winnings are paid out from losses. If the House goes bust, you just don't get paid until enough losses occur to pay out the win.

Wed, 02/27/2013 - 00:03 | 3280699 CompassionateFascist
CompassionateFascist's picture

"...as soon as I hear the word 'liquidity'...I reach for my gun..."

Tue, 02/26/2013 - 17:21 | 3279236 jcaz
jcaz's picture

Awesome- Tulipcoins....  Cause no one ever thought of this before.....

Tue, 02/26/2013 - 19:14 | 3279681 Againstthelie
Againstthelie's picture

YYes, it's embarassing that precious metals supporters fall victim to this trick. As bad as a government can be, at least it is an authority. But this is pure privately organized money. Fascinating how people prefer fiat money from private companies over fiat money from their state with a certain authority. This has all elements of a mania.

Tue, 02/26/2013 - 21:46 | 3280177 Half_A_Billion_...
Half_A_Billion_Hollow_Points's picture

 

 

Manias and Ponzis dont bounce back.  Now go on crying like a baby, beach --> http://blockchain.info/charts/market-cap?timespan=all&showDataPoints=fal...

Tue, 02/26/2013 - 17:38 | 3279309 Hobbleknee
Hobbleknee's picture

I support anything that competes with government fiat.  But I don't think I'll ever get any bitcoins.

Tue, 02/26/2013 - 17:47 | 3279356 digitalhermit
digitalhermit's picture

It's okay, they are highly risky and consequently not for the risk averse. Since their value could easily return to zero one should not invest more than one is willing to lose when it comes to bitcoins.

But aren't they pretty? :-)

https://www.casascius.com/photos.aspx

O.o

Tue, 02/26/2013 - 17:57 | 3279408 SilverIsKing
SilverIsKing's picture

ShitCoinTM

 

Tue, 02/26/2013 - 18:40 | 3279469 digitalhermit
digitalhermit's picture

I think the correct term you were looking for is ButtCoin - sorry the domain (and idea) is taken:

http://buttcoin.org/

Tue, 02/26/2013 - 17:13 | 3279188 CH1
CH1's picture

BitCoin, brought to you by the same power elite who own the money printing industry.

You know, you should really understand a thing before you not only condemn it, but attribute a nefarious origin to it.

Don't be an ignorant dick.

Tue, 02/26/2013 - 18:23 | 3279526 XenoFrog
XenoFrog's picture

Stop trying to recruit people into a ponzi scheme.

Tue, 02/26/2013 - 20:53 | 3280023 Haole
Haole's picture

Ponzi scheme? Bitcoin?

You, like others in here evidently, have absolutely zero idea of what you're talking about.

Tue, 02/26/2013 - 22:30 | 3280362 XenoFrog
XenoFrog's picture

I have some snake oil i'd like to sell you. Buy now before its value skyrockets.

Do NOT follow this link or you will be banned from the site!