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Saturday, Aug. 27, 2016

New bitcoin ATM could change the future for bitcoin ATMs

Wednesday, January 13, 2016

Tony Virelli, John Hass and Aaron Techen, members of the local technology community TechKnow, built a bitcoin ATM and will place it in the breezeway of the TechKnow building -- on 38th Ave. W. -- for public use. This bitcoin ATM is, to their knowledge, the first in Iowa.
(Photo by Kate Padilla)
In 2008, bitcoin emerged as a decentralized digital currency invented by Satoshi Nakamoto. Since then, it's grown in value and use within the technology community. More recently, ATMs have been developed to help consumers more easily translate centralized currency, such as the U.S. dollar, into bitcoin without needing a credit card. Earlier this month, several members of TechKnow, a local technology community, built a bitcoin ATM of their own.

"Tony (Virelli) built the interface, Aaron (Techen) built the case and I wrote the back end software," said John Hass, one of the builders and a member of TechKnow. "In total, it took us about a week."

To purchase digital coin with the ATM, a person feeds a cash bill into the machine and selects the currency to purchase. In addition to bitcoin, the ATM also allows consumers to purchase lightcoin and dogecoin, other digital currencies. After selecting the currency, the screen will display the price for a full coin, as well as the percentage of coin purchased in the current transaction. Bitcoin is currently being purchased for over $400 per coin.

"Because it's decentralized, no bank is required," Hass said. "It's run by a peer-to-peer network. Bitcoin is essentially a block chain of numbers, all open-source, that automatically adjusts its ledger to show who owns which portion of the block."

According to Virelli, only a set amount of bitcoin will ever be released. The currency is still able to be "mined," but as the outstanding amount of bitcoin dwindles, mining will be made more and more difficult.

Bitcoin, along with lightcoin and dogecoin, is stored on a digital wallet, in the same way paper cash is stored in a physical wallet. Wallets are free from the ATM, and can be printed out on a slip of paper as well as stored on devices. There is also a scanner in the ATM to scan the wallet directly from a device.

"The ledger is public," Hass said. "As long as you have your private key you can access your money. We definitely encourage people to print out a copy of their key and store it in a safe place -- like a safe deposit box -- and then carry that key around on your devices. As long as you have that key, the money can be traced back to you and can't really be stolen. But, if you lose the key, you lose the money in the wallet."

But there are two things that make TechKnow's ATM different than other ATMs available right now, Hass said. The first is the cost: They spent about $500 on the total construction, while ATMs sell for between $6,500 and $14,000. But second, once they built their ATM they published the software code open-source on their Gitub page, for anyone else in the world to download for free and build their own ATM at a much cheaper price.

"It is the first open-source ATM," Hass said. "Technically, you can use the code to build any ATM."

"Once we published it, we tweeted the link out," Virelli added. "It received quite a few initial responses, but then we learned that a blog in Spain actually wrote a blog post about it, and said we changed the outlook for bitcoin ATMs."

The group is currently fine-tuning the machine's capabilities, but will soon display it in the breezeway of the TechKnow building -- located on 38th Ave. W. -- for the general public to use to purchase bitcoins.

"Right now, we're basing this off our wallets," said Hass. "In future (software) releases, we hope to tie it into market exchanges."

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