Bitcoin, the emerging if still somewhat mysterious digital currency, may be coming soon to a high-tech ATM near you.
Kiosks that allow people to buy the virtual coins, or exchange them for cash, will be installed within the next month or so in Seattle and Austin, Texas, according to Robocoin, the Las Vegas-based company that makes the machines.
They will be the first such ATMs in the United States. Robocoin has installed machines in Vancouver, British Columbia, with more in Canada, Hong Kong, Europe and Asia in the works.
The emergence of public ATMs, the company says, is a step toward making Bitcoin, a currency that’s not backed by a government or bank and has no physical assets to prop up its value, a more comfortable buy for mainstream users outside the Webcentric circles where it currently thrives.
“We think it’s a huge breakthrough when it comes to bringing accessibility to the consumers,” Robocoin CEO Jordan Kelley said.
Since its inception in 2009, Bitcoin has fluctuated wildly in value. Currently, a single Bitcoin is worth about $636. That value was as high as $1,000 in December as investors began leaping into the currency.
Some traditional businesses, including online retailer Overstock.com, some Subway sandwich shops and Richard Branson’s Virgin Galactic, have begun accepting Bitcoin.
But the anonymous nature of the currency also has linked it with less reputable outlets. Bitcoin and other digital “cryptocurrencies” have been the de facto payment system on underground websites that deal in drugs, weapons and other illegal merchandise.
Last week, the anonymous owners of black-market website Silk Road announced that hackers had stolen $2.7 million worth of Bitcoin. In separate incidents, several online Bitcoin exchanges have been taken down by hackers who exploited a flaw to create fake transactions.
Kelley wants his company’s machines to help the currency shed its shadier associations, even if that means alienating some supporters who like the mostly anonymous nature of Bitcoin exchanges.
“We’re trying to move Bitcoin, put it in the mainstream, bring it to the masses,” he said. “To do that, some things have to go by the wayside, and one of them is anonymity.”
To create a Robocoin account, a user enters their mobile phone number at one of the kiosks. The machine sends a code to that phone and, after the user enters the code, they are asked to scan the palm of their hand.
“Your phone is your user ID and your palm is your password,” Kelly said.
The user is then asked to insert a driver’s license or other government-issued ID, further personalizing their account as well as providing Robocoin an opportunity to verify the user’s name against government watch lists for terrorists or others who may not legally do business in the machine’s home country.
Then, the user takes a photo at the kiosk, which must be verified as a match with the picture on their ID card.
Once their account is verified, a process Kelley said takes two to five minutes, they are free to buy Bitcoins at the kiosk. Customers may either transfer them to an account, using a private code the machine dispenses, or use a smartphone app to store them on their phone.
Robocoin sells the machines for $20,000. Owners make money by charging a small transaction fee to use them, Kelley said.