The bitcoin craze has physically landed in Abbotsford.
The decentralized digital currency has moved off of the computer and into restaurants, coffee shops and even a dispensary, with three bitcoin ATMs arriving in Abbotsford in the past few months.
For those new to the bitcoin game, the virtual currency was introduced in 2009 and operates entirely online with no central bank or single administrator. Users need to have an online wallet and can use the bitcoins to buy goods or trade with others via the internet.
“Essentially bitcoin is a virtual currency and only exists online,” said UBC Computer Science assistant professor Ivan Beschastnikh. “It has no physical manifestation and it’s not backed by any of the traditional value we associate with currency like gold or the reputation of a nation. It devises its value from the fact that somehow people are willing to pay money for it or exchange goods for it in the real world.”
Beschastnikh explained that bitcoin originally became popular with users on the dark web – a small part of the internet that is not indexed by web search engines and could only be accessed using specialized peer-to-peer networks. The anonymous nature of bitcoin has attracted some criminal elements, with users having the ability to launder money or purchase drugs more easily and less identifiably through the currency.
But the skyrocketing value of bitcoin has led to more and more people buying, trading and trying to make money off the currency. As of press time, one bitcoin is equal to around $19,000, and the value has increased 10 times since the summer.
For Ravi Malharu, the owner of Couch Novelties on South Fraser Way in Abbotsford, the bitcoin ATM he installed a few months ago is another way to draw people to his business.
“I first heard about bitcoin about two years ago,” he said. “I bought into it and have followed it ever since. People have been having to run into Vancouver to get bitcoins so I figured it seems to be getting popular enough to have one out here. Customers seem to be pretty amazed, I don’t think too many have ever even seen one.”
Malharu said the machine’s traffic has been increasing on an almost daily basis.
“People who aren’t even really interested in what we have here are coming in and using it,” added Couch Novelties employee Andrew Williams. “Customers are always asking about it.”
Elsewhere, Abbey Road Taphouse has big plans for their ATM and bitcoin in general.
Manager T.J. Gill installed his bitcoin ATM earlier this month, and said the idea is to provide more payment options for customers.
“We decided to get one just because of all the hype but the idea is to help the business side,” he said. “I want to take bitcoin here; it’s not a gambling or trading thing for us, it can be a service. We want to start taking them as a form of payment, and we’re looking into details on how we can do that.”
Gill said the machine has attracted some attention even after only a few weeks.
“People are pretty excited about it,” he said. “We want to make sure it’s safe to customers and I think it’s a good thing. We just want to be able to provide a service for our customers.”
Beschastnikh said bitcoin ATMs have appeared elsewhere in the Lower Mainland, but admitted that they don’t really offer anything different from what you could get on your home computer.
“From a technical point of view there’s really not any benefit to a bitcoin ATM,” he said. “An ATM at a physical location seems fairly inflexible. But, on the other hand, there is a movement by people who want bitcoin to survive and thrive – probably because they own a lot of bitcoin and want the value to increase and it to become a viable currency. An ATM is a strategy to legitimize the currency. If you see a bitcoin ATM on the street you might be more likely to trust it and use it.”
He said the possibility is there that bitcoin could be used in stores, restaurants and other places goods and services are purchased, but the currency still has a few hurdles to jump before its fully embraced by the public.
“As bitcoin stabilizes, becomes a usable currency and resolves the security concerns around it, it could become a viable currency,” he said. “But it will always be competing against national currencies.
“Another obvious direction is it could just blow up. Right now there are a lot of technical issues with the currency, and transactions take a long time to clear. For example, transactions take over an hour to process – if that persists I can’t see it becoming usable.”
Beschastnikh said that people do seem to be making money off bitcoin investments for the time being, but noted the security concerns with the currency.
“If you share your computer with someone or someone else accesses your account there is nothing you can do, ” he said. “With existing banks if someone takes all of your money from an ATM there is some recourse. If it happens with bitcoin, it’s gone forever. It’s also important that readers are aware it’s a very volatile market and they should do their research and be careful before investing large amounts of money.”
Those wanting to learn more can check out the three ATM locations in Abbotsford, and at least one of the owners of the machines seems to think bitcoin or cryptocurrency is here to stay.
“I think in the future our kids are going to laugh at us when they see us take our VISA card out to pay for things,” said Malharu, laughing. “They’ll ask ‘what’s that’ and then take out their phone to pay.”