Bitcoin ATMs are set to make their first appearance in the UK next month, with a number of start-ups racing to be the first to offer machines that allow users to buy, sell and convert the virtual currency on central London’s streets.
Global Bitcoin ATM and ‘boutique real estate developer’ Joel Raziel are battling it out to get their hole-in-the-wall bitcoin machines up and running by early February.
The move to place bitcoin in the UK’s financial mainstream follows the successful launch of bitcoin ATMs in three Canadian cities. The world’s first bitcoin ATM was a Robocoin machine installed in Vancouver last October. To illustrate its potential appeal, that machine processed 1,500 transactions worth more than C$1m (£550,000) within its first month.
Indeed, this is an exciting time for all those involved in bitcoin.
Interest in the currency continues to rise and, with various central banks anxiously looking on, its advocates have been talking up the impending release of UltraCoin – dubbed ‘Bitcoin 2.0’ – which developer Reggie Middleton describes as “an intelligent derivative layer of smart financial contracts that sit on top of the Bitcoin architecture”.
Back in London, Global Bitcoin ATM has ambitious plans to install five machines every month, before taking the concept across Britain and, ultimately, globally.
The company has a high street location in mind for its first machine, but will not confirm where it is until the Robocoin unit can be installed.
Spokesman Terry James told Coindesk: “The first machine is due in February, and we’ve got two already paid for. We’re hoping it will be the first of its kind in the UK.”
Meanwhile, Raziel has identified a location in east London for his first $5,000 ATM, and another operation, Satoshipoint, is looking to locate bitcoin ATMs at bureau de change outlets in Oxford Street and Notting Hill. Satoshipoint is looking to charge a commission of 3-5% on transactions.
Bitcoin is a completely new currency concept that, its supporters argue, has the potential to revolutionise both the workings and perception of money.
Being completely virtual – there are no physical coins – bitcoins are stored in password-protected, highly-encrypted digital wallets on a computer hard drive or memory stick. Lose your password or your hard drive, and your bitcoins are history.
Payments and exchanges are executed via a worldwide distributed network which cuts out the banking sector and its transaction and conversion fees. International bitcoin payments are virtually instant and cost just a few pennies, threatening one of the traditional banks’ revenue streams.
Bitcoin also poses a serious challenge to central banks – such as the Bank of England, the Federal Reserve and the European Central Bank – because the cryptocurrency is beyond their control. Not only does the currency use a distributed network that no one owns, but there will never be more than 21m bitcoins in existence, so the banks cannot ‘print’ more or impose interest rates.
Not only this, but bitcoin also opens the way for innovative new business models, and this is partly reflected in the ATM machines themselves.
Also, Global Bitcoin does not intend to own all the ATMs it instals, but will manage them on behalf of individual owners. The company also intends to sign up with Bank to the Future, a project designed to help grow bitcoin projects in London.