Cash, credit ... or bitcoin? St. John's gets 1st cybercurrency ATM
Owner of Fifth Ticket restaurant says system is 'low risk' and could draw customers
In the ever-expanding online economy, people in St. John's can now withdraw cash from the province's first bitcoin automated teller machine.
"It seems lots of places around the world are starting to accept it," said Fifth Ticket owner David Primmer, who had the ATM put in his restaurant at the end of September.
Primmer agreed to the idea because he said it is "relatively low risk" and "when tourists come here, naturally I want them to come in my restaurant to get their funds and spend it here."
The bitcoin ATM was installed by Ray Bursey of Ghost Technologies. When asked why people should trust the unregulated banking system, Bursey said, "Why do people think their money is safe in banks? ... The money is not there, it's the exact same thing."
What is bitcoin?
Bitcoin, which first appeared in 2008, has made some people very rich and also created some skeptics.
It was invented by a then-anonymous online entrepreneur who went by the fictitious name Satoshi Nakamoto, and at one point was seen as a safe haven for unscrupulous individuals looking to move around large amounts of money.
"Some feel it was used by drug dealers and that it's untraceable, but that is 100 per cent false," Bursey said.
"Every transaction on bitcoin can be traced back to the exact minute and address it came from."
Bursey said when he first took notice of bitcoin back in 2012 a single coin was valued at roughly $20. The exchange rate on Oct. 4 was 5,964.48 CAD.
Within the bitcoin system, goods and services can be purchased without having to pay fees, but withdrawing money is a different story. Bursey charges a six per cent fee for ATM "sell orders," part of which goes to vendors such as Primmer.
You have to own bitcoin to withdraw from the machine at the Fifth Ticket. What comes out is cash.
Primmer said only a few people have used the bitcoin ATM at his restaurant in the week since it was installed. He knows it will take some time to catch on, but hopes the machine will "open up a market for it."
Making cyber money
Bursey said while bitcoin may not be common in Newfoundland and Labrador, in some parts of the world it is wildly popular. Japan, for example, has 350,000 establishments which accept the cryptocurrency.
He said every transaction is approved by a complicated mathematical formula through a network of computers, in a process called mining.
Being part of the group verifying the movement of money earns credits, which then convert to bitcoin. All the work is actually done by a computer that sits in your garage or basement.
Bursey said the computer burns about the same amount of electricity as a 1,500-watt baseboard heater, but you "get the heat from it and can make some money."
While he can set you up with what you need to get started, Bursey said he doesn't recommend people get involved unless they have "money to spare."