Boulderites among early adopters of Bitcoin BTM
Walk into the Amante coffee shop at 2850 Baseline Road in Boulder on any given morning and you’ll see what looks like an automated teller machine sitting against a wall.
A handful of people — a techie, a welldressed, middle-aged couple — use it throughout the day. But this is not your grandmother’s ATM. It’s a Bitcoin teller machine, a portal into the brave new world of cryptocurrency.
Some call this new kind of money the grandest experiment of our time. Others fear its rising power, and the rest of us have no idea what the heck it is.
Boulder’s Eric Weissmann was fascinated early on with the potential of digital currency. When the opportunity arose to own and operate Bitcoin teller machines, or BTMS, he jumped in and founded Modern Tender. Weissmann thought the architecture of the code, the blockchain, had the potential to transform currency markets.
“I was interested in Bitcoin and thought the blockchain technology was revolutionary, so I wanted a foothold in the space. We reached out to Amante because we wanted a location that was upscale, easily accessible, and attractive to early adopters and the tech demographic,” Weissmann said.
BTMS are still largely a rarity. There are 13 statewide, including two in Boulder — Weissmann’s at Amante Coffee and in the tech accelerator Spark Boulder, 1310 College Ave.
The two BTMS in Boulder were installed in February 2015. The Spark machine is owned by Aurora-based Xbteller.
Operating outside the traditional banking system with no regulatory oversight, BTMS have experienced a surge in use as more people turn to cryptocurrencies as a haven from political instability and distrust of government-backed currencies.
For baby boomers, the concept of mobile money meant automatic teller machines. Moving forward the millennials have redefined the idea of mobile by pushing all fi-
nancial operations online, and in the process, they have created entirely new types of currency.
Cryptocurrency, at its most basic, is digital money created from computer code.
This system emerged after the 2008 stock market crash. Bitcoin, the first on the scene, was designed to bypass third-party agencies and central banks.
As a rising number of users participated in Bitcoin’s peerto-peer network, the need for a more efficient means of buying and exchanging Bitcoin grew with it. Prior to the introduction of BTMS, acquiring Bitcoin was complicated and lengthy.
But BTMS are changing that. Just like traditional ATMS they provide efficient access to the currency on-the-go.
FT Technology reporter Sally Davies in a recent article compares the relationship between Bitcoin and blockchains to that of the internet and emails. According to Davies, blockchain is to Bitcoin, what the internet is to email. Blockchain is the broader electronic system from which you can build different applications, like Bitcoin.
Using BTMS isn’t cheap. The machines charge a fee on each transaction. Similar to traditional ATMS, these transaction fees vary between machines depending on the operating company that controls it. But BTMS charge fees based on a percentage of the value of the transaction. Most traditional ATMS charge a flat fee.
The average BTM fee is 10 percent to buy Bitcoin and 6.3 percent to sell it, according to Coinatmradar, the first database created for Bitcoin ATMS. The steep fees, experts said, are due to legal fees and costs associated with converting Bitcoins to cash.
New Hampshire-based Lamassu was the first to manufacture a Bitcoin teller machine in the U.S. Weissmann bought one to put in Amante.
“In the past, Bitcoin has been quite difficult to acquire,” Lamassu customer service manager Neal Conner said. “If you were obtaining it online, it need- ed to be through an exchange and then approved based on documents submitted by the user, including the transactions made and proof of a bank account. To do all of that takes time, so when it comes to digital currencies, users are willing to pay a little more for commission if they’re doing so instantly via machines.”
Bitcoin is no longer the only cryptocurrency available. Upstarts such as Ethereum, Ripple and Litecoin are up and running, and growing fast, according to Coindesk, a market research firm.
Worldwide, digital coins are valued at nearly $80 billion, but the value of the new currency swings dramatically. Just last month it peaked at $115 billion.
It’s that volatility that has added to debate within the financial community about how these currencies will develop and if they are sustainable.
Most following the digital currency market believe that a crash is very unlikely. Sharp movements in a market during early stages of maturation is nothing new for cryptocurrency buyers who attribute the instability to the process of forming an entirely new asset class.
“If you think about the qualities currency must posses, process will tell you that it is something divisible, durable, uniform, widely accepted, and in limited supply. I think that cryptocurrency represents something that has all of those traits and does so better than any (traditional) currency today,” said Dan Briere, an analyst with New York-based Chainalysis. Chainalysis provides software to government agencies and financial institutions involved in banking Bitcoin or investigating activity on the blockchain.
But there has also been plenty of controversy surrounding the digital currency.
In the early years, blockchain technology was used for the exchange of illegal substances or other criminal enterprises. The secretive nature of the system meant that users were not required to disclose their personal information when creating a personal address. Therefore such exchanges as the notorious Silk Road drug channel were initially hard to trace and terminate.
A Bitcoin teller machine sits inside Amante Coffee in Boulder on Wednesday. BTMS are still largely a rarity. There are 13 machines statewide, including two in Boulder.