World's first Bitcoin ATM goes live in Vancouver
VANCOUVER -- Bernd Petak recalls a time when, curious about how exchanging cash for the digital currency Bitcoin worked, he stood at Union Square in New York City and wandered among the sellers to try and get the most bang out of his buck.
"You meet at a certain time outside and there are people standing around with their hand up, and they'll sell you Bitcoin, and you can shop with various people and you can see who has the best price," he said.
Such transactions involve buyer and seller scanning each others' smartphones to transfer the Bitcoins -- a virtual currency that isn't controlled by a central bank -- to the buyer's so-called digital wallet.
On Tuesday, however, the world saw the first Bitcoin automatic teller machine go live in a downtown Vancouver coffee shop, allowing people to exchange Canadian cash for the digital currency at a current rate of $211.79 per Bitcoin.
New users set up a digital wallet by scanning their palm on the machine, while others who already have a Bitcoin wallet select how much money they want to spend, insert the cash, and scan a complex square bar code on their phone to have the Bitcoins transferred to their wallet.
Petak, who came to check out the machine on behalf of his technology investment firm, said he enjoys using Bitcoin because it is can be used wherever merchants accept the currency.
"If you've ever dealt with your bank in an international context, you're never quite sure whether your Visa card's going to be taken, you're never quite sure whether your ATM card is going to work where you are," said Petak, who came to check out the machine on behalf of his technology investment firm.
"This basically gets around all of that."
Bitcoins are transferred through a peer-to-peer network and transactions appear on a public ledger that is accessible to all who use the currency. Users must first set up a digital wallet, which gets managed through an app.
Bitcoins are typically bought through an exchange. The process involves setting up an account, waiting about a week for it to be verified, and then transferring funds to the account so that one can start buying Bitcoins.
Mitchell Demeter of Bitcoiniacs, a Bitcoin broker and the firm that installed the ATM in Vancouver, said Bitcoin transactions are much more convenient than other forms of payments because transactions are instant and there are no processing fees.
"Right now, if I wanted to send you $5,000, and say you're in Toronto, it would take three to five days for a wire transfer to come through and it would cost me $35, and it would cost you a fee," he said.
"With Bitcoin, I can send you that money instantly and it would cost pennies."