A Canadian bitcoin exchange company has brought a slew of Bitcoin Teller Machines (BTMs) to the Greater Toronto Area in the hopes of attracting more casual users to the volatile cypto currency.
On Wednesday, CAVIRTEX, released six new BTMs in Toronto and Mississauga that they say provides an easy and accessible experience for users looking to purchase bitcoins.
While bitcoins have been consistently making headlines over the past year, many people remain reluctant to invest in the digital currency partly because of the intimidating technical aspect of the purchase.
What Are These Machines
CAVIRTEX's BTMs provides a physical way for new and experienced bitcoin users to buy and sell bitcoins.
After undergoing a verification process that involves entering your mobile number into the machine and entering a verification code that is sent to you, users select whether or not they would like their bitcoins to be deposited directly to their digital wallet or to a paper wallet that the machine generates.
Once that is done, users can feed cash into the machine, which is then converted to bitcoins, based on an exchange rate calculated in real-time (and which has been known to fluctuate wildly. The currency is then deposited in their respective wallets. No more that $3000 can be converted in one day.
Kyle Kemper, CAVIRTEX VP of business development, hopes that the familiarity of these ATM-type machines will encourage people who may have been hesitant or unaware of how to acquire the digital currency.
Currently, the most common ways for bitcoin transactions is through third-party exchange websites such as CAVIRTEX or by contacting a prospective buyers or sellers directly.
"The Bitcoin ATM allows you to immediately [purchase bitcoins] and it's safe and it's private," said Mr. Kemper. "The other option is to go and meet someone directly and when you meet someone directly, there is an element of risk there and trust and not everyone's up to that."
While there will be a transaction fee associated with BTMs, Mr. Kemper was unable to say what that fee will be other than the fact that it will be percentage based.
Currently CAVIRTEX has six bitcoin machines in various Gateway Newsstand locations across Toronto and Mississauga including Yorkdale Mall and Square One.
While these are not the first BTMs in Toronto, CAVIRTEX says that the additional number terminals will establish the city as the BTM capital of the world.
What are Bitcoins?
Bitcoins are a volatile digital currency that can used to make a number of purchases.
On Dec. 4 2013, the price of a bitcoin was valued at $1,147.25 US according to coindesk.com, a website that tracks the digital currency. On April 10 2014 its price dipped to $360.84 US per bitcoin
As of 2 p.m. on Aug. 13, one bitcoin is valued at just under $589.98 CAD, according to CAVIRTEX. However, its value is constantly in flux.
Opinions on these machines
While BTMs are sure to increase bitcoin's presence in the physical world, economists remain hesitant to recommend investing in and using the volatile currency.
Lisa Kramer, an associate professor of finance at the University of Toronto, agrees that seeing more BTMs in public will make the bitcoin more familiar to the average person and equates them to currency exchange kiosks that are commonly found in airports.
"Just like we see currency exchange kiosks at the airport where they provide a service for a transaction fee," she said. "I just hope that people who are using the BTMs recognize what they are purchasing and are aware of the risks inherent in bitcoin."
When it comes to exchanging Canadian currency for bitcoins, Dr. Kramer cautions people to evaluate the reasons why they are making the exchange considering that the digital currency's value is not regulated and can change instantly and dramatically.
"The nice thing about the Canadian dollar is that it comes with lots of protection so if you have a bank account in Canada and that bank goes bankrupt, there are insurance programs in place that can protect you," she said. "Nothing like that exists for bitcoin right now.
"I would say buyer beware."
For Mr. Kemper, bitcoins present consumers with an alternative currency that these machines make more accessible.
"Bitcoin is a digital currency but you can purchase physical goods with it so it is really the future of money."