NYC, Meet Your Bitcoin ATM

You can already get gourmet cupcakes from an ATM in New York City, so why not get your virtual money the same way? On Aug. 21, Manhattan debuted its first Bitcoin ATM in the West Village. This first New York Bitcoin ATM has been installed by Flat 128, one of the many stores in and around NYC that already accepts Bitcoins as a form of payment. The ATM was created by Lamassu, a self-proclaimed “Bitcoin ventures company.”

Bitcoin calls itself the “first decentralized digital currency” that allows you to make transactions without any annoying middlemen (a.k.a. banks). Your Bitcoins are stored in a digital wallet that allows you to make purchases or send money to friends virtually. Before the ATM, Bitcoin users could only purchase the virtual currency online, through Bitcoin exchanges like Mt. Gox. With the new ATM, users experience faster transactions and greater convenience, according to Lamassu’s founder, Zach Harvey.

Manhattan's Bitcoin ATM follows a handful of ATMs that have popped up around the country in the past year, including Chicago's first Bitcoin ATM, which debuted in July. CoinDesk.com provides a "Bitcoin ATM Map" that directs users to the closest Bitcoin ATM, no matter where they are in the world. But first-time users, beware: In order to use the new Bitcoin ATM, you need to have already set up a Bitcoin wallet, plus used regular money to purchase Bitcoin currency. Additionally, the new ATM will have charge a transaction fee, so your “instant bitcoin gratification” comes at a price.

Several small businesses in New York have joined the Bitcoin bandwagon, largely because there are no credit card fees involved. For example, one Manhattan newsstand owner told Gothamist that he accepts Bitcoins instead of credit cards, because “it’s riskier dealing with credit card companies than it is with bitcoins.” According to CoinMap, other businesses that accept Bitcoins include EVR, a midtown manhattan bar; PitaCity; and Park South Dentistry, among hundreds of others.

Despite the many perceived benefits to small businesses, however, many are skeptical of Bitcoins' lack of regulation. The New York Department of Financial Services is, incidentally, hoping that New York will become the first place to regulate the virtual currency and make it less risky to use.

Additionally, back in June, Congress announced that the Consumer Financial Protection Bureau needed to start paying more attention to Bitcoins, claiming that consumer protection issues were being overlooked with the new virtual currency trends. Though seemingly the CFPB has taken little action to regulate Bitcoins since June, other agencies like the IRS and the Federal Election Commission have taken action to oversee virtual transactions.

According to Lamassu, the next step is to develop the system to function like a typical ATM as well, allowing customers to use the Bitcoin ATMs to withdraw cash. The ATM’s operator, Matt Russell, told Gothamist, that he and his company “ want to make Manhattan ‘Bitcoin Island.”

Manhattan might not be totally Bitcoin-friendly yet, but if bars, restaurants, dentists, and law offices are starting to take Bitcoins, I have a feeling that 'Bitcoin Island' might become a reality sooner than we think.