And it begins. Among the hundreds of bank machines in Richmond, at least two stand alone in offering a fast-growing currency taking the online world by storm.
Bitcoin machines have sprouted up at Waves Coffee in City Centre and at Lansdowne Centre.
The digital currency is currently valued at about $428 per bitcoin. Consumers buy bitcoin with traditional currency. They may trade it digitally anywhere in the world or buy products from people or retailers who accept the model.
At DMac Computers at Lansdowne, a BitSent Bitcoin machine dispenses bitcoin codes to a consumer’s smartphone, which has a digital wallet mobile application that accepts a code, representing the bitcoin, after cash is inserted.
BitSent COO and co-founder Karen Williamson said Richmond’s “demographics” were a reason for installing the machine.
Williamson said an advantage of bitcoin is the next-to-nothing transaction fees.
“So you can send bitcoins anywhere in a matter of minutes” by exchanging the codes for cash or products, said Williamson.
Some say that lends itself to money laundering, however all bitcoin transactions are public record at an online website known as Block Chain.
An employee at DMac said about a dozen people use the BitSent machine every week.
“I find it takes a couple months to take off but it’s been growing over the past month or two,” said Williamson.
She noted consumers must trust digital wallet companies, which she says fall under Canada’s consumer protection guidelines.
Common criticisms of Bitcoin are that it’s unregulated and the value of a bitcoin is highly volatile.
Values at the Lansdowne machine (connected to the Internet) are set by the Bitpay exchange rate, which gathers trading prices from various Bitcoin exchanges and companies and averages them out.
Williamson’s company buys its bitcoins on the open market and takes a five per cent fee.
On Wednesday BitSent charged about $450 for a bitcoin.
Many people use bitcoin on Craigslist to buy and sell items. For instance, one bitcoin may fetch a pair of Canucks tickets in the lower bowl: the buyer sends her bitcoin code to the seller’s digital wallet and the seller sends the tickets via email.
And the digital, paperless world spins.
Bitcoins can be divided up to 10 decimal places so you can also buy cheaper items.
PayPal can now be used to purchase bitcoins, as the currency gains traction.
Bitcoin inherently favours computer programmers who can “mine” bitcoins by solving ever-increasingly difficult algorithms from the shared public network.
There are about 13.5 million bitcoins in the world and the public network will be capped at 21 million. Some speculate it’s a scheme or the values will plummet as Bitcoin won’t gain mainstream traction. Others speculate a bitcoin will only rise in value, over time.
