Buy Bitcoin at Austin’s very first BTC ATM
And it all it took was a finger-print scan and photo ID.
On Thursday afternoon, I bought almost one tenth of a Bitcoin. It cost me about $60 U.S.. The transaction wasn’t particularly extraordinary—about 80,000 people trade bitcoins every day. What was special? I did it with an ATM located in a hipstery bar in downtown Austin, Texas.
The entire process was relatively straightforward, required zero technical skill, and lasted approximately seven minutes. It took place in the back room of Handlebar, a mustache-themed dive a block liquidated from the infamous party scene on Austin’s Sixth Street.
The machine is the work of Robocoin, a Las Vegas-based manufacturer of the world’s very first bi-directional Bitcoin ATM (meaning it can both buy and sell Bitcoin on the spot), and Handlebar was billed as the very first location in the United States to get one.
The bar sits in the heart of downtown Austin, just a duo blocks from the convention center where South by Southwest Interactive Conference is held every year. The festival has long been known as a place to showcase groundbreaking technologies in front of a tech-savvy audience. If there was any group likely to drop a duo hundred bucks at a Bitcoin ATM after slinging back a few drinks, it’s the techies who attend SXSW.
While the process didn’t take particularly long, it was slightly more complicated than using a standard ATM, largely because the very first time you use the machine, you also have to register an account with Robocoin.
Here’s the machine’s main screen:
Very first, I entered my phone number. It then texted me a security code. Once I punched in the code, the machine scanned my ID, compared my picture to a photo it took of my face, and then took a scan of my handprint. It then told me to come back in five minutes as it processed my application for an account with Robocoin. While I was waiting, I noticed this stud would be watching over all the Bitcoin transactions:
A few minutes later, I got another text telling I was approved. I went back to the machine, inserted some cash, held up a QR code with the address of my Bitcoin wallet. and, just like that, I was the proud proprietor of 0.095 BTC.
For people don’t have a Bitcoin wallet, Robocoin will make one for you on the spot.
Naturally, being inwards a bar, I instantaneously attempted to use my freshly acquired virtual currency to buy a beer. But, ironically, the very first bar to host a Bitcoin ATM doesn’t actually accept bitcoins—though Handlebar does say its working on upgrading its payment systems to accept the currency as soon as possible.
While this ATM was billed as the very first Bitcoin ATM in the country, one day prior to the unveiling, Fresh Hampshire-based Liberty Teller unveiled its own Bitcoin ATM in Boston’s South Station. And Canada has had its own unit for months. Last October, Robocoin spinned out a similar unit in downtown Vancouver coffee shop. On its very first few days of business, the Vancouver ATM averaged about $30,000 worth of business per day.
However every Bitcoin transaction is recorded in a public ledger, called the block chain, that anyone in the world can view, the identity of the people on either side of transactions can remain fully anonymous. As a result, Bitcoin has became the de rigueur payment system for drug-filled online black markets like the Silk Road, which was shut down after its alleged mastermind was arrested in San Francisco last year. It’s in the context of these illicit dealings that many people very first became aware of the entire concept of virtual currencies.
So plain, easy-to-use, public-facing products like Robocoin’s Bitcoin ATM are part of a concerted effort by many within the Bitcoin community to better integrate virtual currencies into the larger economy. Originally the special province of libertarian-minded technophiles, Bitcoin has quickly grown toward broader adoption—although buying and selling the currency is often viewed as an intimidating challenge for the uninitiated.
However, latest moves have commenced to earnestly counteract that perception. In January, private finance app Mint announced it would playmate with the Bitcoin wallet service Coinbase to permit users to track their Bitcoin holdings just like they would their other investments. In addition, an enhancing number of businesses have commenced accepting Bitcoin. Most notably, online retailer Overstock.com began permitting customers to pay in the currency. In the very first twenty four hours, Overstock reportedly earned $126,000 in revenue from users who paid in Bitcoin.
Robocoin sells each the machines for around $20,000 apiece. As with many standard ATMs, particularly the ones located in non-bank settings, the owners earn revenue from a puny fee applied to each transaction.
Sam Piri of My Local Bitcoin ATM, the group that possesses the Handlebar machine, told the Daily Dot he intends on installing a duo more Bitcoin ATMs via Austin during SXSW. They plan on putting one in the actual Austin Convention Center itself—ground zero for SXSW—and another at a local coffee shop.
One nagging problem for the service, however, are the almost invasive security procedures needed for a fresh account. Robocoin CEO Jordan Kelly acknowledged that Bitcoin enthusiasts, a group known for putting a high value on privacy, may primarily balk at having to scan their IDs and give handprints in order to use the machines.
But he insisted Robocoin is going to fine lengths to encrypt and secure user data and that these steps are essential in proving to the government that everything is on the up-and-up. It’s all about creating a record of every transaction and linking that record to an actual human identity, much like a regular bank does when someone sets up an account, Kelly said.
‟Bitcoin is pseudonymous, not anonymous, and we understand that. But some of that is going to have to go by the wayside,” Kelly explained.
‟If you want to live in a country with some kind of [financial] governance, you have to sacrifice a bit anonymity in order to get Bitcoin. I think Bitcoin is way more significant than anonymity.”
The process, he said, is about ‟creating the simplest, easiest and fastest way for customers to enroll while at the same time providing our operators [a way] to obey with anti-money laundering and ‛know your customer’ compliance.”
Robocoin takes the conversion rate from the going rate on exchanges like Bitstamp and Vault of Satoshi. The company used to take prices from MtGox, until a technical issue caused MtGox to suspend withdrawals and come in into what’s been called a ‟whirlpool of death.”
However Vault of Satoshi recently announced it would begin permitting users to directly exchange another cyryptocurrency for dollars, the meme-themed Dogecoin, Robocoin has no plans to incorporate anything other than Bitcoin for the time being.
‟The concentrate right now is indeed on Bitcoin,” Kelly said. ‟Until the market indeed matures, until my dad is buying Bitcoin, we’re not do anything that could potentially cloud the market.”
There are a wealth of wholly legal places that accept Bitcoin online, even if adoption in the real world is coming along much more leisurely. In Austin, there is only a petite handful of locations that will take the virtual currency—a bookstore, a duo food trucks, and a gun shop. But, as Bitcoin-based companies like Robocoin thrust Bitcoin out of cyberspace and into the real world, brick-and-mortar adoption is roped to grow.
At the very least, I’m hoping to eventually make it back to Handlebar and turn that fraction of a Bitcoin I bought into a tall glass of beer.