There is no such thing as a Bitcoin coin.
That may be surprising to some people who are new to the world of Bitcoin and cryptocurrencies in general, but Bitcoin isn’t a physical coin that can be held in one’s hand. It is virtual, a cryptocurrency, stored in a virtual wallet downloaded onto a smartphone or printed as an icon on a piece of paper.
Although it can be used to buy things in Canada, Bitcoin is considered a commodity rather than a currency in this country, according to cryptocurrency expert Akram Ayach, head of operations for Coin Nation ATMs of Halifax.
While it can be used to make purchases here, that is only accomplished by first converting it to Canadian dollars, Ayach said. He believes Bitcoin is best treated like it was a stock, held by an individual with the hope the value of the Bitcoin will continue to go up and then can be cashed in.
The value of a Bitcoin on the Canadian Bitcoin exchange on Thursday was $17,300 and a Litecoin was $300 on the Quadrigacx Exchange in Vancouver, Ayach said in an interview.
There are about 270 Bitcoin machines in all of Canada, and slowly the Bitcoin automated teller machines are being introduced in the Maritimes by Coin Nation ATMs.
The machines are not connected to a bank, which means that transactions are in cash only, at least for the time being.
Coin Nation’s ATMs — five machines located strategically in Halifax and one in Saint John, N.B. — support only two cryptocurrencies, Bitcoin and Litecoin, which are traded on the Quadrigacx.
If someone was to purchase a Bitcoin or a portion of a Bitcoin at one of its ATMs, Coin Nation would charge 10 per cent of the value of the transaction as a fee. Another 10 per
cent would be charged by the ATM owner if a customer used one of Coin Nation’s ATMs to sell the cryptocurrency or a fraction of Bitcoin back to Coin Nation.
The Halifax company doesn’t own a franchise although the manufacturer of the machines,Genemaga of South Korea, has a preferred relationship with Coin Nation, said Ayach.
Stephen Offman, the CEO of Coin Nation, said he became familiar with Bitcoins because he already owned and operated a significant number of private ATMs using Canadian currency.
Offman said he first tried to put his Bitcoin machines in places like shopping malls and airports but was faced with too much bureaucracy. He decided to move the machines into places such as a corner store and a couple of pizza restaurants instead.
“And guess what? I’m doing as much business at these pizza places as I would at any airport or any . . . shopping centre,” he said in a recent interview.
Now that the word is out about the Bitcoin ATMs, according to Offman, people are begging to get a Bitcoin machine in their store. But he’s restricting the roll-out of the machines in an effort not to cannibalize his existing business.
People who want to use the machines hunt them down, and the places where the ATMs are located have seen their business increase on average about 15 per cent, he said.
There is a limit of $9,000 on a single transaction on the machines, said Ayach.
But Offman said the movement of assets from Canada to another country is quite easy using Bitcoin and by using the ATMs. The Bitcoin can be acquired from the Coin Nation ATM and cashed out once the individual gets to their eventual destination.
Coin Nation has plans to eventually have 30 Bitcoin ATMs throughout the the Maritimes.
-By Roger Taylor