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The bulwarks of financial privacy may, by default, become unsanctioned, underground networks like Bitcoin and startups run by youngsters brazen, or naive, enough to test the legal and regulatory limits.
February 12 -
Coinbase makes it simple to buy and sell bitcoins via a bank account, but plays only to the low-fee, frictionless nature of Bitcoin and fails to leverage its unique privacy aspects.
February 22 -
If U.S. know-your-customer rules required banks to identify and scrutinize foreign recipients in addition to the senders of money, other countries would likely return the favor.
February 26 -
Banks are beginning to use considerable discretion in deciding what constitutes an illegal act and sometimes even an immoral act. Freeze the funds first ... ask questions later.
February 12
It looks like a high school science project, but this countertop machine may be a bulwark of financial privacy in the age of digital money.
Last weekend at the
Similar to the way a vending machine operates, the orange prototype accepts cash bills and reads a QR code containing the depositor's Bitcoin address. After subtracting a 1% transaction fee, it delivers bitcoin to the address in about five seconds. The Bitcoin Machine can accommodate paper note denominations up to $100.
Previously, individuals who wanted to purchase bitcoin privately without revealing personal details had to arrange face-to-face meetings through
Now, with a device that directly converts paper cash to bitcoin anonymously, the interaction is between human and machine. The value of that subtle difference should not be underestimated. No longer does the buyer of bitcoins have to show his or her face, or trust counterparties to make good on their end of a deal. Depending on how many bills each bitcoin ATM can hold and how much bitcoin it can digitally store, users can now enter the bitcoin
The New Hampshire-based startup,
This could prove to be very profitable for the establishments hosting the machines if their bitcoin inventory gains dollar value prior to sale. Additionally, Lamassu Bitcoin Ventures could be the exclusive provider of bitcoin for the ATMs or partner with an existing exchange to provide greater risk management.
Even people who have been in the Bitcoin world for a while and have used every type of exchange are blown away by the simplicity of this machine," Harvey said. "I'm just putting in a dollar. Before they really know what's going on, their phone tells them, 'You have Bitcoin.'"
Despite media reports claiming this to be the world's first Bitcoin ATM, that notable distinction belongs to Todd Bethall of
Launched in 2011, Bethall's beta ATM comes equipped with a Genmega GK1000 Kiosk running Windows XP Pro with ActiveX drivers for the bill acceptor, printer and card reader. The California corporation that owns the original Bitcoin ATM was recently
Jon Matonis is an e-money researcher and crypto economist focused on expanding the circulation of nonpolitical digital currencies. His career has included senior posts at Sumitomo Bank, Visa, VeriSign, and Hushmail. Currently, he serves on the board of the Bitcoin Foundation. Follow him on
