With a quick flash of their smartphones, Fells Point bar-goers will be able to exchange their beer money for bitcoins.
Bad Decisions, a bar in the Baltimore neighborhood of Fells Point, is offering patrons something unexpected: an ATM kiosk where people can buy or sell bitcoins, a form of digital currency that’s been gaining traction since it was introduced about six years ago.
Bitcoins aren’t physical tokens or paper bills. Bitcoin is the most well-known example of a new form of unregulated currency that exists only electronically, sometimes called “cryptocurrency.”
The new ATM at Bad Decisions allows Bitcoin users to deposit cash in exchange for bitcoins, or “deposit” bitcoins in exchange for cash, according to Eric Grill, CEO of CoinOutlet Inc., the ATM’s manufacturer.
Here’s how it works: Bitcoin users store their bitcoins in a digital account of sorts, called a bitcoin wallet, which they can access through an app on their smartphone or computer. To use the ATM, an individual opens the app on their phone, and scans it against a reader on the ATM.
Once that link has been established between the machine and the user’s bitcoin wallet, the ATM knows where to send the currency (or where to make the withdrawal). The user can then feed as much cash as they’d like into the ATM, and the comparable amount of bitcoins will show up in their digital wallet.
At the current exchange rate, one bitcoin costs about $387. However, that price fluctuates enormously and rapidly — bitcoin’s volatility is perhaps one reason the currency has yet to become widely used by mainstream consumers.
But that doesn’t mean the currency isn’t growing in popularity. More businesses have started accepting bitcoins as payment. When Bad Decisions decided to accept the currency in December, the bar was the first brick-and-mortal establishment in the area to do so.
Now, about 20 business in Maryland, from jewelers to consultants, accept bitcoin, according to Coinmap.org.
But Bad Decisions is again ahead of the pack. The bar is the first establishment in Maryland to have a bitcoin ATM, according to Grill, whose company, CoinOutlet, is one of several bitcoin ATM manufacturers.
The bar also hosts monthly meetings of an informal group of bitcoin enthusiasts, called Bitcoin Baltimore.
“It all started at Bad Decisions,” Grill said. “So I really wanted to put the first one in there.”
But Grill and his team of 11 employees (who are all paid in bitcoins) have plans that go way beyond a neighborhood bar on Fleet Street.
Last month, CoinOutlet signed a deal with Locant Services, a company that places kiosks, pay phones and other equipment in high-traffic locations worldwide. Locant owns the rights to 100,000 such locations, and Grill said he hopes to fill many of them with bitcoin ATMs.
CoinOutlet is based in North Carolina but has offices across the globe. Grill said he and other developers designed the software for the ATMs, but the company works with a manufacturer in China to build the actual machines.
CoinOutlet is currently working to roll out 11 machines across the country, Grill said. Next month, he expects to receive a shipment of 30 machines, which he said will be installed primarily in the U.S. but also in Europe and Latin America.
Then, in December and January, another 76 machines will arrive. Grill said those will be installed worldwide, as well. Each machine costs about $6,000 to produce, Grill said.