You might not have heard of bitcoins, but they’re coming to an ATM near you.
Vancouver has just become home to the first ATM in the world that allows users to exchange bitcoins – the controversial, all digital currency – for cash. Users can also feed cash into the machine to top-up their virtual bitcoin wallets.
The ATM is inside an otherwise unassuming Waves Coffee House at the corner of Howe and Smithe streets in downtown Vancouver. New bitcoin users will have to have their palms scanned in order to set up a bitcoin wallet and use the machine. Then, they can either deposit or withdraw bitcoins in conjunction with a corresponding smartphone app.
While bitcoins have yet to enter the mainstream market, they have attracted a loyal following of users around the world. The virtual currency was created by an unknown computer developer in 2008 and, despite the odds, grown steadily since.
Bitcoins are not controlled by any central bank and those who use them remain anonymous (as opposed to customers who use credit cards and traditional banks). Bitcoins are transferred over decentralized peer-to-peer networks and all transactions appear on a publicly accessible ledger, which makes the currency completely transparent even while actual users are anonymous.
Merchants appreciate bitcoins because they don’t have the high transaction fees associated with credit cards and they transfer immediately. Meanwhile, the currency has also gained notoriety for use on illicit websites like Silk Road, the online drug portal shut down earlier this year.
Currently, approximately 16 businesses in Vancouver accept bitcoins, according to the Vancouver Sun. Among the merchants are Krystal Fit Studio, a personal training business, and Pacific Bliss Yoga, which was the first business in Western Canada to take bitcoins from customers.
While some questions remain about whether bitcoin even is a real currency, the value of the digital coins has nonetheless skyrocketed more than 1,000 percent over the past year. In January 2013, bitcoins were being exchanged for $13. Now, they’re selling for around $200 each.
Approximately 11.5 million bitcoins are currently in circulation. “Minting” will cease once 21 million bitcoins are in circulation.