Bitcoin has existed for about five years, but in recent months there’s been ample reason to wonder if its end is near. Lack of government regulation, volatile price fluctuations and potential for money laundering schemes cast a shadow over the decentralized digital currency. More bad news came in the form of Bitcoin’s connection to the online black market Silk Road, global cyber attacks and software glitches. By late February, Bitcoin’s value was sinking fast.
And yet, the price has quickly rebounded, rising from around $400 to more than $600 per Bitcoin. And many consumers and commentators still champion the open-source peer-to-peer currency for its low transaction fees. Now with two Downtown casinos accepting the digital currency for non-gambling transactions, Las Vegas is betting on Bitcoin again. And a local startup is all in.
Robocoin is a new Bitcoin ATM developed in Las Vegas and shipped worldwide. CEO Jordan Kelley, who runs the company out of Downtown’s Ogden, hopes to smooth the process of acquiring the currency and thus broaden its appeal.
“Bitcoin isn’t even out of the womb yet,” Kelley says. “But we want to be the ones who take Bitcoin to the masses.”
Before Robocoin, it could take days to process Bitcoins purchased online; in that time, the value of a single Bitcoin could increase by more than $100. Robocoin reduces the wait to minutes, with security measures built in: You scan your hand and ID for authentication; facial recognition then matches your face with your ID. Once verified, you can buy and sell Bitcoins and store them in your digital wallet. The company is not the only one making Bitcoin ATMs, but only its machines allow users to both buy and sell the digital currency, and dispense US dollars.
Robocoin operators are responsible for customer service and supplying enough Bitcoins for transactions. Kelley and his small crew have sold Robocoins in Austin, Seattle, Canada, Hong Kong and Europe at $20,000 per machine. With media buzz from The Wall Street Journal, CNN and TechCrunch.com, Kelley says many Las Vegas casinos are also interested, although they haven’t inked any deals yet.
Introduced in 2009, Bitcoin operates as a form of payment but is also similar to stock, where the value changes with the supply and demand. People who bought Bitcoins four years ago could sell them now for as much as 41 times the original cost, according to CoinDesk Bitcoin Price Index. Major retailers such as Overstock.com have recently begun accepting Bitcoins, and in January The D and the Golden Gate became the first local casinos to allow guests to pay the front desk in Bitcoin.
With all of the hoopla surrounding the new currency, many observers still wonder if there’s enough public demand. Facing that question, Kelley likes to tell this story: One day in November, the line of customers waiting to use Robocoin stretched out the door of a Vancouver coffee shop. The ATM sold out by 2 p.m., Kelley says, totaling $150,000 (Canadian) for the day. Most of the customers were first-time purchasers.
“When email was invented, were people thinking they would stop sending letters in the mail?” he asks. “We think of Bitcoin as the new email.”