LONDON-Britain's first machine for dispensing digital currency opened for business in a cafe near London's "Silicon roundabout" tech hub in east London on Friday, offering customers the ability to exchange bank notes for bitcoins.
Nick Letchford, managing director of the group that owns the Old Shoreditch Station cafe, decided to install the machine after noticing the popularity of bitcoins among his customers working nearby in the digital industries. "It gets used regularly based on where we are located," he said. "There are lots of technology-orientated consumers within our area, and it caters very easily for them," he said.
"Currently people are buying coffees and beers with bitcoins, mostly beers actually," Letchford added. He sees a mainstream future for the virtual currency, even though the top bitcoin exchange has collapsed and the currency has been volatile due to speculation as well as prone to criminal activities. At the beginning of March, the Tokyo-based company Mt. Gox, once the world's biggest bitcoin exchange, declared bankruptcy saying it had lost bitcoins and cash worth some half a billion dollars due to hacker attacks.
In 2012, a leaked FBI report said the virtual currency was an "increasingly useful tool for various illegal activities beyond the cyber realm". Bitcoin, which has been growing in popularity, relies on a network of computers that solve complex mathematical problems as part of a process that verifies and permanently records the details of every bitcoin transaction. The currency came into existence in 2009, with the value negotiated by individuals chatting on bitcoin forums. The whistle-blowing site Wikileaks and other organisations began to accept the currency for donations, and by the end of 2012 some 1,000 organisations had followed suit.
Customers who use the machine in East London are charged an 8 percent commission, and each customer is limited to 1,000 pounds ($1,700) in transactions per month. "I think it is very much a burgeoning thing," Letchford said. It's not mainstream in any way, but I think from a vendor's perspective it is so straightforward and simple. There is a future in it as it becomes embraced by the mainstream."