On Thursday, organizers will unveil the USA's first Bitcoin ATM machine, tucked in the backroom of a downtown Austin bar. And just in time for SXSW, the three-week interactive/film/music conference that begins Mar. 7.
Launched in 2009, Bitcoin is a decentralized digital currency that is traded mostly online and person to person rather than through banks. Started by programmers whose identity remains anonymous, the cyber currency has been gaining popularity in the USA and accepted as payment at scores of businesses.
The first Bitcoin ATM was launched at a Vancouver coffeehouse last year. Austin, known for its vibrant tech community as well as scores of music clubs, was a natural spot to launch the first U.S. Bitcoin ATM, said Jordan Kelley, chief executive of Robocoin, the Las Vegas-based company that makes the machines.
"We're really excited about the community and culture Austin has," he said. "And it's a fantastically central location. It's right on the 50 yard line of the U.S."
The ATM will be located at the Handlebar, a hipster hangout on East Fifth Street in Austin. The machine will scan a user's palm print and government-issued ID to verify identity then allow them to add money to a virtual Bitcoin "wallet" or withdraw the currency to a mobile phone app, Kelley said.
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The machine will also perform a one-time face recognition scan to verify users' identity. "All you need is your phone, your ID, your palm and your face – all the things people carry with them on a daily basis," he said.
Bitcoin, which could be used to buy everything from steak dinners to sporting event tickets, has had its share of controversy recently.
Federal agents charged a Bitcoin dealer last month with money laundering for allegedly se! lling more than $1 million worth of the cyber currency to people on a black market website that deals with drugs and illicit goods.
And last week hackers forced the shutdown of Bitcoin's largest exchange service, Bitstamp, for several days. But the popularity of the virtual currency continues to climb, trading at more than $600, according to Bitcoin websites.
Bitcoin's usage will only continue to surge, said Antonis Polemitis, manager partner of Ledra Capital LLC, a New York-based venture capital firm investing in Bitcoin-based companies. Bitcoin today is at the level where the Internet was in 1994 or 1995, with 20 years of application in its future, he said.
"It really allows people to interact with each other to exchange value – whether it's currency or other types of assets – without a central party in the middle," Polemitis said. "It's mind-blowing."
Reza Piri, an Austin web developer and entrepreneur, met with Kelley last month while on his bachelor party in Las Vegas. After a morning meeting, he was purchasing two of the $25,000 machines and bringing them back to Austin. He plans to showcase one at SXSW, when more than 30,000 tech attendees and industry leaders are expected to descend into the city.
"Austin is perfect for this," Piri said. "We want to make [Bitcoin] mainstream and bring it to the people."
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