If you put £20 in the new Shoreditch bitcoin ATM three years ago, you would have £8,000 today
PUBLISHED: 16:09 13 March 2014 | UPDATED: 17:17 13 March 2014
The UK's first ever bitcoin hole in the wall has been installed near Silicon roundabout in the heart of techie land, to cater for the digital currency's popularity amongst workers there.
The ATM can be found in the Old Shoreditch Station, which became the first café in the UK to accept the cryptocurrency a year ago.
Entrepreneur Joel Raziel is passionate about the potential of bitcoins, and founded company Future Coins to source the ATM from an Icelandic company.
He said: “Bitcoins have been very difficult to acquire historically. If you want them instantly, this is the first opportunity for people to do so without having to buy them off an individual or mining for them on the internet.
“You can transfer your money to a bitcoin exchange, which is a bit like a currency trading site, but that can take several days for the transaction to clear.
“Most people who want to invest in bitcoins can’t be bothered as it takes so long and is so much hassle, so this is the first option for people to easily buy them.”
The ATM accepts banknotes in return for bitcoins. Customers use a mobile wallet app on their smart phone to display a QR code for their Bitcoin wallet, which the cash machine scans and sends money to once they insert the amount of cash they wish to convert.
On Monday, when the Gazette team visited, £5 was converted into 0.01 bitcoins through the machine, which was then used to buy a green tea and cappuccino at the café.
Customers are charged eight per cent commission, and each ATM customer is limited to £1,000 of transactions per month.
“It’s been far more popular than we expected,” said Mr Raziel.
“There have been queues at times. If there is anywhere in London where people are willing to try new things and embrace new ideas it’s here – just look how people dress,” he joked.
“A lot of people say: ‘Well why would you want them, we have pounds, why do we need one of these things?’
“One reason people might want them is they were worth less than a pound three years ago and now they are worth more than £400, so if you had put £20 in here three years ago you would have £8,000 today.
“Tragically I was a latecomer to bitcoins, I’m not one of these millionaires who have popped up – so many technical people who decided to set up this mining software years ago have become rich beyond their wildest dreams.”
Two weeks ago, however, the top bitcoin exchange, Mt Gox, collapsed after hackers attacked and took bitcoins and cash worth half a billion dollars.
Speculation has also made the currency volatile, and in 2012, a leaked US Federal Bureau Investigation report said the virtual currency was an “increasingly useful tool for various illegal activities beyond the cyber realm”.
But Mr Raziel still sees a future for the virtual currency.
“Like anything starting out, it can be subject to all sorts of fluctuations and hurdles, but what’s magical is that it’s survived the crash of one of the largest bitcoin exchanges.
“Pessimists were expecting the currency to completely flat bottom to as low as $10, but the drop we saw was minimal compared to previous fluctuations. It wasn’t catastrophic.”
“The HMRC has recently decided to treat it as a currency, so there will be VAT to be paid by the companies dealing with it, which is not the case at present.
“Every step towards legitimising the currency is a small step towards its stability, and what we are hoping for is stability so it can become a global player.”