There’s a new kind of ATM in metro Denver. It doesn’t dispense dollars. It churns out bitcoins, a digital currency that is backed by no national banks. A fledgling company, XB Teller, opened the ATM this summer.
Noah Berger, the CEO of XB Teller, says buyers feed dollars into the machine to purchase bitcoins. The bitcoins then get sent to the buyer’s bitcoin address -- sort of like an email address. Berger admits the whole idea can be tough to understand because bitcoins can't be held in your hand.
“I think calling it bitcoin to begin with was sort of a funny choice because no there are no coins at all," he says. "I think it’s just a way to invoke the image of money in people’s mind."
The ATM is tucked into the corner of a nondescript gardening store in a strip mall in Aurora. He says to understand Bitcoin, it’s helpful to think of the Internet. Bitcoin is a technology platform that’s loosely managed by a global network of volunteers. In other words, it’s not privately owned and backers say what’s unique about it is that it’s a form of money transaction that doesn’t involve a middle-man like a bank or a credit card.
Right now, consumers can use bitcoins at several big name stores, including Overstock.com, Expedia.com, Dell and Dish Network. About 100,000 businesses use Bitcoin, but Berger concedes while that may sound like a lot, it's not much in the overall scheme of things.
“The vast majority of merchants in the world aren’t accepting bitcoin at all, though I think it is getting on to their radars,” says Berger. “It’s not something that needs to replace the whole world of commerce, and anyone who thinks that it should is no different than someone who thinks that gold should be the only money that exists.”
The value of bitcoins has fluctuated widely since the currency was launched in 2009, but some investors have made a lot of money over the years trading it. Along with bitcoin ATMs, bitcoins can also be bought and sold through online traders.
Bitcoin was the brainchild of Satoshi Nakamoto, the pseudonym for the person or group who created and designed the original Bitcoin software. Since it's launch in 2009, several poems and songs have been written about the creator of Bitcoin.
Some economists predict bitcoin will become more widely used. Michael Casey, who’s covered the currency for The Wall Street Journal, says if the network grows, it has the potential to change the way people do business.
“It could eventually undo a century’s old system that we’ve had since the Medicis invented banking in the Renaissance,” Casey says.
However, Casey says some economists and reporters, including many of his colleagues at the Journal, think bitcoin could easily be a short-lived experiment.
Watch bitcoin explainer from CoinDesk, a group that follows digital currencies.
