Automated teller machines that are popping up in the Valley include a growing number that deal in cryptocurrencies, a digital form of money. (Photo by Zach Copley/Creative Commons)
WASHINGTON – They look like ATMs and they work like ATMs – you walk in and feed the machine your cash.
Just don’t call them money machines, because these ATMs don’t give back cash, they give back bitcoin credits along with a receipt.
ATMs specializing in the cryptocurrency bitcoin are beginning to pop up from Peoria to Mesa, helping cryptocurrency technology move from the realm of computer programmers to the world of bank tellers.
“So far it’s been crypto-nerds and mathematicians and computer science geeks that have dominated the space and those people are absolutely needed in order to create the technology,” said Ryan Taylor, CEO of the Dash Core Group, which is behind the cryptocurrency called Dash.
“I think when you prioritize and educate merchants and consumers on the benefits, I think we’ll start to see more and more adoption happening,” Taylor said.
The ATMs are also a tangible proof that Arizona is at the center of this emerging technology, according to business leaders and advocates.
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Coinsource, the largest bitcoin ATM network in the U.S., recently opened five new ATMs in the Valley. Currently, the Arizona ATMs allow only one-way transactions – offering bitcoin credits in return for a deposit – but they are helping to justify cryptocurrency as a legitimate form of cash rather than a valueless virtual craze.
“We felt like there was a market there to tap into and I’m glad we did, it’s turned out to be a really good market so far, so were pretty excited about,” says Coinsource cofounder Bobby Sharp.
He said his company decided to expand operations to Arizona in part because of the state’s fertile tech market.
“I mean as far as tech is concerned, you guys are through the roof,” Sharp said. “There’s a lot of companies in the tech world, and in particular cryptocurrency, that are going into Arizona.”
Along with the Coinsource ATMs, Scottsdale-based Dash is one of the 10 largest cryptocurrencies in the world. Numerous other companies that deal with cryptocurrency and blockchain technology, like Alt Thirty Six and Sweetbridge, are based out of Arizona.
Taylor said Dash, which is affiliated with Arizona State University, is trying to help the state become a central location for cryptocurrency and blockchain, the secure technology behind virtual currencies.
Aaron Kelly, a partner at the Kelly/Warner law firm in Scottsdale, said Arizona is at the forefront of this technology.
“We’re one of the few states that has passed legislation related to blockchain,” Kelly said. “Arizona is becoming a safe haven for tech companies, so I expect more favorable laws for blockchain in the future.”
Kelly was referring Arizona HB 2417, signed into law in March, which officially recognizes electronic signatures on contracts, a further legitimization of blockchain technology.
Cryptocurrency, or more simply virtual cash, allows users to pay for goods and services without physical currency and because it is decentralized it bypasses bank fees. The use of digital cash in collaboration with blockchain technology provides added security and transparency benefits that current financial institutions don’t have.
“Everything financially, you can do on your own without a middleman,” Sharp said. “What I think is going to happen is that individuals are going to be able to bank themselves.”
Blockchain is the underlying technology that allows for safe, transparent transactions with cryptocurrency. It is a digital ledger that tracks all purchases and allows for open peer-to-peer review, with all transaction details shown on a “block.” The blocks are then listed and linked in chronological order on a chain, a blockchain.
Taylor said that there is “enormous potential in this industry,” but that the immediate future of the technology and the future prices of cryptocurrency are “very difficult to predict.”
“Anybody that claims that they can predict it is lying to you or themselves,” said Taylor.
But many remain optimistic.
“I do think that it has a place and it has very specific benefits that will help it expand quite rapidly over the coming years,” Taylor said.
Kelly agreed.
“We’re standing on the edge of something with enormous possibilities and implications.” he said. “There’s a saying in the bitcoin community: ‘To the Moon.’ And that’s where I see the future of this technology going.”