Bitcoin Boom? An ATM for Virtual Currency in the Works
Users of virtual money are about to get a real machine to access their digital cash.
In an effort to simplify access to the virtual currency Bitcoin, the head of TDV Media is working to launch an ATM that enables users to manage their Bitcoin accounts.
"We've come up with a bitcoin ATM, and the reason we've done that is because it's been a little hard to get access to BitCoins," said Jeff Berwick, TDV's CEO, on CNBC's "Squawk on the Street." He added: "You can trade them over exchanges over the Internet, but it's not all that easy to do."
A bitcoin is a decentralized open currency based on open software that uses peer to peer connections for monetary transactions. Paper currencies can be exchanged for bitcoins and can be used wherever they are accepted.
Users can also exchange their bitcoins for the original currency, with an increasing number of businesses and individuals accepting them as payment.
A BitCoin ATM has software that enables a two-way automated system for exchange of currency. Users can deposit fiat cash in exchange for their BitCoin balance to increase, and can exchange BitCoin credits for cash.
In the wake of Cyprus' financial turmoil, interest in the digital money has exploded. Analysts say the growing popularity of BitCoins is a symptom of a world in which ordinary citizens are becoming increasingly wary about the value of paper money.
(Read More: Bitcoin Bonanza: Cyprus Crisis Boosts Digital Dollars )
(Read More: What Is Bitcoin? )
While the digital currency has its fair share of critics, the increasing value of the bitcoin shows that its gaining traction.
According to Bitcoincharts.com, the bitcoin traded at about $108 Tuesday afternoon — a more than threefold increase from its value six months ago, when it traded for $29.35.
Berwick said that people are turning to the bitcoin because its the only currency operating in a truly free market.
"The Internet is the last place where there is actually a free market on Earth...And there are the kinds of really interesting, exciting innovations that can come from the free market," Berwick said.
"You look at Bitcoin and is an entirely new currency, completely decentralized, anonymous, transactions occur incredibly fast for free, all designed by the free market."
Berwick said in a statement that he plans to launch the first bitcoin ATM in Cyprus, where the bank bailout situation caused banks to close for several days and where cash withdraws from ATMs was capped.