AN ENTREPRENEUR has announced he is keen to introduce in Cyprus the world’s first ATM for virtual currency, bitcoin, which is not regulated by a central bank but has instead been growing via its online peer-to-peer community.
Jeff Berwick, founder of StockHouse.com and CEO of TDV Media said on his blog on dollarvigilante.com that he plans to set up the world’s first Bitcoin ATM in Cyprus to enable people to deposit flat currency into it and get bitcoins in their account, as well as put bitcoins in their account and get flat currency back.
Bitcoin, which was designed and implemented by a mysterious programmer known by the pseudonym of “Satoshi Nakatomo,” is based on a peer-to-peer network similar to the BitTorrent protocol for sharing files over the internet, the European Central Bank (ECB)has said in an October 2012 report on virtual currency schemes.
It can be used as currency for a number of transactions, from internet services and online services to buying clothes, electronic goods, while a small number of restaurants, hotels and retail stores across the world do accept bitcoins.
With restrictions likely in place when the banks do reopen, Berwick said he “began pondering what tangible solutions there (were) to bank holidays and bank runs.”
“If these people had simply bought bitcoins with their savings, not only would they currently have 100 per cent access to their funds, but also they would have enjoyed a parabolic move to the upside over past months,” Berwick said.
The currency is not pegged, with supply and demand determining the exchange rate. People need to download a free and open-source software to start using bitcoins that can be purchased using a currency, and are then stored in a digital wallet on users’ computers or via online services. Transactions are not restricted by a Central Bank, are faster, and cheaper or free. Although users are drawn to the currency for transaction privacy and anonymity, the system has been criticised for being vulnerable to cyberattacks or for being attractive as an alternative currency to fund illegal activities.
The ECB said in its report that it considered bitcoin “as a high-risk system for its users from a financial perspective” citing a number of issues that “raise serious concerns regarding the legal status and security of the system, as well as the finality and irrevocability of the transactions, in a system which is not subject to any public oversight”.
On the other hand, Berwick said that individuals have suffered “through the confiscation and devaluation of their savings through techniques like taxes, levies and inflation” by the ECB, the International Monetary Fund, and the German Federal Government.
“I am convinced bitcoin will be the currency of the future… and all the attacks on it by governments and central banks shows they know it,” Berwick said.