Throughout January, people trickled in and out of a four-storey complex on Spadina Avenue and King Street. The 5,500-sq.-ft. space is empty save for a few makeshift tables and chairs in a corner and a bright orange ATM close to the entrance.
This is Toronto’s first ATM to dispense bitcoin, the electronic currency growing in use on the Internet, and the second bitcoin ATM in the world. The first is in Vancouver.
“It’s the convenience of the matter,” said Anthony Di Iorio, executive director of the Bitcoin Alliance of Canada and the man responsible for bringing the machine to town. “You can buy [bitcoins] on exchanges online … but it requires a lot of effort…. But with an ATM, you’ve got a location that people can come down to, they know the hours they can come down and get bitcoins.”
The machine operates on a phone number system. You key in your number and a verification code gets sent to your mobile. Once you have entered the verification code on the ATM, you can scan your digital wallet’s Quick Response (QR) code using an app like Blockchain. If you do not have a digital wallet, the machine also prints a one-time paper wallet that you can scan. After scanning your digital wallet, simply feed notes into the machine, follow the prompts and the money will be exchanged for bitcoins that will be deposited into your online wallet instantly.
Full-time bitcoin trader Alex Dionisio, who drove an hour and a half from Brantford, thinks the ATM is “awesome.” It was his second trip to the ATM this month.
“Bitcoin is so fast and so cheap to use, very convenient and safe,” Dionisio said, as he loads a small stack of $100 bills into the ATM one at a time.
There is a limit of $2,000 per day per person. However, because the ATM uses a phone number system, one can use a second phone number to exchange beyond the $2,000 limit.
“Bitcoin is so fast and so cheap to use, very convenient and safe.”
The ATM sits in Bitcoin Decentral, Toronto’s latest trendy hangout for the curious and bitcoin enthusiasts. Di Iorio describes Bitcoin Decentral as “a co-working, accelerator/incubator space for bitcoin and bitcoin related activities,” where he holds the Bitcoin Toronto Meetup, a weekly social gathering that takes place on site every Wednesday evening.
Bitcoins are a decentralized digital currency not controlled by any government or bank. It is the first cryptocurrency to begin trading in 2009 and can be transferred instantly between two people anywhere in the world without going through a bank thereby avoiding high bank fees.
As bitcoins are an online currency, they can be broken down into smaller fractions, allowing users to buy even their morning cup of coffee.
In the past month, major retailers Overstock.com and Vancouver eyewear retailer Clearly Contacts began accepting bitcoin. People can also buy subscriptions and upgrades on websites such as WordPress, Reddit and 4Chan. Even the NBA sports team, Sacramento Kings, has stepped into the market.
Bitcoin has slowly gained traction in the Toronto market as well.
Accepting bitcoin in Toronto are sports gun vendor Ark Army Surplus, office rental company Coworking Space Toronto; advertising agency HQVB, and hypnosis clinic The Morpheus Clinic.
“I wanted to cater to the early adopters who have a surplus of bitcoins and nowhere to spend them.”
– Luke Chao
Luke Chao, managing editor of The Morpheus Clinic, said, “We started accepting bitcoins in mid-2011. I wanted to cater to the early adopters who have a surplus of bitcoins and nowhere to spend them. Also, taking payments by bitcoin means saving on credit card transaction fees,” said Luke Chao, managing director of The Morpheus Clinic.
The cryptocurrency made waves in October after millions were associated with the illicit black market site Silk Road. The FBI shut down the website and seized its assets, which included 26,000 bitcoins worth around $4 million at the time. When the news broke, the bitcoin value plunged by nearly 25 per cent. It recovered steadily but took another severe hit when China banned all bitcoin transactions through Chinese banks in December.
Despite its unpredictability and critics lambasting its bubble nature, Di Iorio is certain it is not a bubble waiting to burst.
“It’s still a very small percentage of the population that know about bitcoin,” he said. “Once they realize how amazing bitcoin is and how they can save so much money using bitcoin, how easy it is to send bitcoins and make transactions anywhere in the world…. I think it’s really going to grow and I think we’re only seeing the very beginning of it right now.”