Cryptocurrency may be the future, but it lives in what is, for many, still a cash world.
So while bitcoin advocates push for ways to encourage people to use the digital form of payment, they also must meet consumers — and their wallets — where they are.
A company that plans to install as many as 100 bitcoin ATMs by year's end installed the region's first of the machines Monday night at Fells Point bar Bad Decisions. More are planned for Baltimore-Washington International Thurgood Marshall Airport and Amtrak stations, Wal-Marts and 7-Eleven stores around the region.
While usage of bitcoin is still low — even at establishments like Bad Decisions, a well-known early adopter of technology and social media — advocates hope the ATMs will make it easier for technophiles to give bitcoin a try.
"It's going to be an easy entry point for consumers to actually get bitcoins," said Josh Riddle, CEO and co-founder of Bitsie, a Baltimore startup that works with brick-and-mortar stores to help them accept bitcoin payments.
Otherwise, the virtual currency exists solely online. A public ledger system tracks who owns which bitcoins, each of which was worth about $380 as of Monday. Most bitcoin users get them by buying them on one of a host of online exchanges, or by accepting them for goods or services being sold. Bitcoin "miners" generate new bitcoins by helping to process and verify bitcoin transactions.
The currency is not backed or controlled by any government, but its advocates say it is safer than traditional money. The transactions are secured by "military grade cryptography," according to the Bitcoin Foundation, and the codes that are assigned to bitcoins that verify a person's ownership can be stored on devices that don't remain connected to the Internet, protecting them from hackers.
But uncertainty over the safety and future of bitcoins has contributed to wild swings in their value. Bitcoins, which can be divided in pieces down to eight decimal places, have lost two-thirds of their value since hitting a peak of nearly $1,150 apiece in December 2013.
Bitcoin ATMs allow users to quickly use cash to buy bitcoins or to turn their bitcoins into bills. There are only about two dozen around the country; until Monday, the closest ones to Baltimore were in New York, Chapel Hill, N.C., and Columbus, Ohio.
The North Carolina-based company Coin Outlet installed the machine at Bad Decisions, a logical choice because it is the site of a regular meetup of bitcoin enthusiasts, Coin Outlet CEO Eric Grill said. But the plan is to go well beyond the bar — Coin Outlet has a relationship with Locant Services, a company that operates kiosks for payphones, ATMs and other services at 100,000 locations across the country.
Grill said the ATMs are intended both to expose a wider audience to bitcoins, and to offer it as a cheaper and easier alternative for buying bitcoins.
Bitcoin trading on online exchanges and even through in-person transactions typically involves marking up bitcoin prices by as much as 5 percent to 7 percent, but the Coin Outlet ATM won't add that fee. Instead, the company bought half a million dollars' worth of bitcoins at a wholesale level, allowing it to still make money from its transactions without those charges, Grill said.
"We want to keep it cheap because we want people to come and use it," Grill said.
John Reusing, owner of Bad Decisions, said the bar gets a handful of people who pay in bitcoins every month. Usage of bitcoins remains sparse in the region, with furniture store Su Casa among businesses working with Bitsie to accept bitcoin payments, Riddle said.
But adding the ATM could help raise awareness, prompting people to ask questions about bitcoin and how it works, and make it more practical for Baltimoreans to consider investing in it, Reusing said.
"I'm sure we're going to get people coming in just to check it out just to see what it is," he said.