How Convenient Will Bitcoin ATMs Really Be?

Feb 21 at 10am

I’m creating a new form of money, it’s called DanBills. The only way you can get DanBills is to send me red, green, or white gummy bears. No yellow, I hate the yellow flavor. Once you get DanBills, you can use them anywhere that accepts DanBills.

I’m just kidding, that would be crazy. No one individual can just invent a new currency and have it accepted by millions of people all over the world. Unless you invented Bitcoin, or Litecoin, Peercoin, Namecoin, Primecoin, or about half a dozen other ___coins.

Bitcoin is the most popular of the bunch so far. In fact it's such a hit that CNN is reporting on a new company that's planning on installing Bitcoin ATMs around the country, starting with Seattle and Austin next month. The ATMs will work more like trading exchanges (such as E-Trade) then an actual bank account, since users are kinda buying into a fluctuating asset. Basically, you'll create an account and deposit US currency into the machine. Then you'll be able to use that money to purchase Bitcoins at the going rate and put them on your ledger. When you need cash, you'll go back to the ATM, sell your Bitcoins at the going rate, and pull out US currency. The amount you put in will probably never be the amount you get out.

The reason that you don't get what you pay for here is that Bitcoins, like stocks, are not stable. Their value fluctuates (sometimes wildly). With most currencies around the world, if you put $100 into your bank account on Tuesday, when you wake up on Wednesday, that cash will be worth more or less $100. (Except for Greece.) On the other hand, in December the value of a Bitcoin went from roughly $1,200 to roughly $575 overnight. It’s kind of like buying shares in Zynga.

One of Bitcoin's original selling points was that there are no government regulations or banking transactions associated with it. With these new ATMs, you'll have to create an account with a government issued license and pay a transaction fee for usage. The interesting thing about these machines, though, is that to access your account, you'll need to scan the palm of your hand, which will become your password. Although I’m going to assume that there will never be a Bitcoin ATM when you really need one. And finally, why would you want to convert your money into something that can only be used at a couple Subway sandwich shops, San Francisco’s Pacific Tradewinds, and to fly Virgin to the moon? It’s not like any of these places don’t accept cash.

Look, if you’re into speculation and have money to burn on a currency a handful of governments have already said they would never take, then go ahead and buy Bitcoins. However at this point, because of the price, you might have already missed the boat. Luckily for you, though, you can still get in on the ground floor with DanBills.

Image from Thinkstock

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