The first ever bitcoin ATM in the world was launched in a coffee shop in Vancouver, Canada, on 29 October, as the world's leading virtual money is getting popular among more businesses, consumers and investors.
The ATM operated by Nevada-based Robocoin and Vancouver's Bitcoiniacs offers an almost instant way to exchange the digital currency for cash. Mitchell Demeter, co-founder of bitcoin trading company Bitcoiniacs and part-owner of Robocoin, is planning to install four more such machines in Canadian cities, Ottawa, Calgary, Montreal and Toronto.
The ATM confirms users' identity by scanning their hand and allows the transfer of the virtual money to or from a virtual wallet on their smartphone. Through the system, users can transfer a maximum of $1,000 per day, limiting chances of money laundering and other fraud.
"It's as easy as walking up to a machine, scanning your hand, entering some cash and buying bitcoin," said Jordan Kelley, CEO of Robocoin that builds the ATMs.
"With this, it's a two-minute process. For any online exchange, it's at least two days."
Robocoin selected Canada for the launch of the ATM due to the country's large number of bitcoin users and its less stringent oversight than in the US.
"We think the Vancouver market is enormous and we're excited to be here," said Kelley.
"By the end 2013, we'll be all over Canada. By the end of 2014, we'll be all over the world, including the United States."
Growing Popularity amid Concerns
Bitcoin, the peer-to-peer virtual currency, was launched in 2008 and is traded within a global network of computers. They can be transferred without going through banks or clearing houses, reducing fees involved in the services significantly.
The value of the virtual currency peaked at $266 per coin in April from $13 in January, as more and more businesses and consumers used it to buy and sell products and services. Meanwhile, investors used the coin as a gold equivalent to hedge against currency fluctuations.
The currency is not backed by any government or companies.
Each bitcoin is worth $210 at present. They can be used to buy or sell products and services online and a few stores like the Waves coffee shop in Vancouver.
Nevertheless, critics say that bitcoins could be used for drug transactions, money-laundering and other illegal activities due to its near anonymity.
Earlier in October, US regulators shut down an online marketplace using bitcoins named Silk Road on charges of buying and selling illegal drugs and regulators seized $3.6m worth of bitcoins.