By Jon Matonis
Wednesday, February 27, 2013
Last weekend at the Free State Project's annual Liberty Forum
in New Hampshire, entrepreneurs Zach Harvey and Matt Whitlock advanced
the anonymous purchasing of bitcoin with their new Bitcoin ATM. The little machine, about 24"H x 12"W x 12"D, exchanged and dispensed over $5,500 worth of bitcoin in one weekend.
to the way a vending machine operates, the orange prototype accepts
cash bills and reads a QR code containing the depositor's Bitcoin
address. After subtracting a 1% transaction fee, it delivers bitcoin to
the address in about five seconds. The Bitcoin Machine can accommodate
paper note denominations up to $100.
Previously, individuals who
wanted to purchase bitcoin privately without revealing personal details
had to arrange face-to-face meetings through LocalBitcoins.com; make use of bitcoin-otc,
an online marketplace where participants take counterparty risk and
rely on user reputations measured by an e-Bay-like ratings system; or
make a cash deposit at a bank or retail location, under the watchful eye of security cameras.
with a device that directly converts paper cash to bitcoin anonymously,
the interaction is between human and machine. The value of that subtle
difference should not be underestimated. No longer does the buyer of
bitcoins have to show his or her face, or trust counterparties to make
good on their end of a deal. Depending on how many bills each bitcoin
ATM can hold and how much bitcoin it can digitally store, users can now
enter the bitcoin blockchain in a very significant and private way.
The New Hampshire-based startup, Lamassu Bitcoin Ventures,
hopes to commercialize the technology and get the countertop ATMs
placed in restaurants, bars and other retail businesses. Harvey told CNET's Declan McCullagh.
"If we made these machines somewhere around $1,000 to $1,500 each,
depending on the commission, they could be able to buy [the machine] and
make it back within a reasonable period of time."
prove to be very profitable for the establishments hosting the machines
if their bitcoin inventory gains dollar value prior to sale.
Additionally, Lamassu Bitcoin Ventures could be the exclusive provider
of bitcoin for the ATMs or partner with an existing exchange to provide
greater risk management.
Even people who have been in the Bitcoin
world for a while and have used every type of exchange are blown away by
the simplicity of this machine," Harvey said. "I'm just putting in a
dollar. Before they really know what's going on, their phone tells them,
'You have Bitcoin.'"
Despite media reports claiming this to be the world's first Bitcoin ATM, that notable distinction belongs to Todd Bethall of BitcoinATM.com, which dispenses plastic BitBills and sends bitcoin to a Bitcoin address.
in 2011, Bethall's beta ATM comes equipped with a Genmega GK1000 Kiosk
running Windows XP Pro with ActiveX drivers for the bill acceptor,
printer and card reader. The California corporation that owns the
original Bitcoin ATM was recently put up for for sale
at the price of 1,500 bitcoin, but that was before bitcoin's recent
price appreciation. At the current exchange levels, the asking price now
works out to about $45,000.