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Bitcoin ATMs will be available to use in London from February, as two startups race to be the first to offer a more convenient way to use the virtual currency.
As HMRC looks set to alter its stance on bitcoin, classifying it as private money, entrepreneurs keen to capitalise on growing interest in the currency are buying up ATMs and refining business models ahead of their delivery.
Global Bitcoin ATM Ltd
One startup, Global Bitcoin ATM Ltd, plans to install five machines per month in the UK, starting with one "in a high street location somewhere in central London," company spokesman Terry James cryptically told CoinDesk.
The firm expects to have its first bitcoin ATM, provided by Las Vegas-based Robocoin, to be installed by early February; the machine can operate two-way conversions between bitcoin and fiat currencies like sterling and dollars, and offers fingerprint scanning for increased security.
Robocoin was responsible for the world's first bitcoin ATM, which was installed in Vancouver, Canada in October. That ATM processed bitcoin purchases and sales with a combined volume of more than $1 million Canadian dollars (£550,000) in its first month, from more than 1,500 transactions.
Over half of the machine's buy transactions were used to send bitcoins to new wallets, proving how significant the machine's simplicity is in attracting first-time bitcoin users.
Global Bitcoin's business plan is not to own the ATMs as such, but to operate them on behalf of their individual owners; the company sources and maintains the machines and find suitable locations to install them in return for payment from the owners through a 24-month contract.
The company says its bitcoin ATMs are "fully compliant with UK anti-money laundering and 'know your customer' legislation as issued by the Financial Conduct Authority."
Bootstrapped for now and without any formal funding, Global Bitcoin plans to join the Bank To The Future incubator for bitcoin startups in London.
Slightly behind Global Bitcoin's schedule, SatoshiPoint hopes to bring two bitcoin ATMs to London in March, also supplied by Robocoin.
The crypto-cash machines will be installed at two bureaus de change on Oxford Street and in Notting Hill, and will charge fees of between 3% and 5%. More ATMs will be bought by SatoshiPoint if the first two prove popular, co-founder Hassan Khoshtaghaza told CoinDesk.
With bitcoin ATMs coming to the streets of London, the currency takes another positive step away from its shady origins and towards a legitimate, trusted future.
Although its once-vital anonymity looks set to take another blow - ATMs from Robocoin offer 'Know Your Customer' features which keep a record of transactions with identifiable information for each customer - bitcoin's value is expected to grow as its usability widens.
Robocoin rivaled by open source alternative
The news of bitcoin ATMs surfacing in London comes as manufacturer Robocoin is threatened by the launch of an open source bitcoin ATM.
The Bitcoin Centre of New York City, an educational institution for promoting awareness of crypto-currencies released both hardware and software to make every aspect of ATM creation open source.
"We chose the open source path for our working bitcoin ATM so a new wave of affordable bitcoin dispensing machines will take this digital commodity to the next level," co-creator Sean Scappaticci said of his venture.