What's believed to be the first Bitcoin ATM in the world is expected to go live Tuesday in Vancouver, operated by Nevada-based Robocoin and Vancouver's Bitcoiniacs.
Mitchell Demeter, co-founder of Vancouver bitcoin trading company Bitcoiniacs and part-owner of Robocoin, has invested in five such machines to be placed across Canada.
Bitcoins are an emerging digital currency that isn't controlled by any authority such as a central bank. It’s an idea that is moving into the mainstream, despite the scandal surrounding Silk Road, an anonymous online marketplace for illegal drugs and other illicit goods that used Bitcoins.
Silk Road was shut down and its owner arrested on narcotics charges earlier this month.
The new ATM, to operate near downtown Vancouver coffee house Waves, will trade Canadian dollars for online Bitcoins. Users are required to do a palm scan and are permitted to exchange up to $3,000 per day.
Canadian cash is exchanged on Canada’s VirtEx exchange for Bitcoins, which are then entered in your online bitcoin wallet. Transactions will be anonymous.
The palm scan is to limit people to less than $3,000 worth of transactions, and avoid tangling with Canada’s anti-money-laundering laws, says Demeter, who adds that he believes he is complying with all Canadian laws
Bitcoins currently trade for close to $200, but have swung widely in value from $13 to $250 in the past year. Until now, most have been traded person-to-person in individual transactions or through various unregulated exchanges that exist mostly online.
Last year, a bitcoin exchange in Europe, Bitcoin-Central, was authorized to operate as a bank. Robocoin, which showed the ATMs at a California conference earlier this year, says the Vancouver ATM is the first to begin operation.
Bitcoiniacs says it's eyeing major Canadian cities such as Toronto, Montreal, Calgary and Ottawa for the other four machines, to come in December.
"Basically, it just make it easier for people to buy and sell Bitcoins and hopefully will drive the adoption of Bitcoin, and make it more accessible for people," Demeter told CBC News.
Bitcoins are mathematically generated through a series of commands executed by computers in a peer-to-peer network. The process is called Bitcoin "mining" and is set up so that the total number of Bitcoins that can ever be generated is limited to about 21 million.
While some have doubted Bitcoin's validity and others have raised concerns that the unregulated currency is being used for nefarious means, a U.S. judge ruled last month that Bitcoin, which has been around since 2009, is a real currency.