Bitcoin machines bring cryptocurrency to bars, other Fox Valley businesses
Signs of what some see as the future of money can be found in bars, gas stations, a currency exchange and other mom-and-pop businesses in Elgin, Aurora and elsewhere in the Fox Valley.
The machines that look like ATMs allow people to exchange cash for digital money known as cryptocurrency, like bitcoin .
“People typically go online to purchase bitcoins. This is a physical manifestation of that,” Northern Illinois University Media Studies Professor David Gunkel said.
A Rockitcoin bitcoin machine is located at the Amstar gas station at Hill and Summit avenues on Aurora’s East Side. In Elgin, machines are located at a Currency Exchange on South State Street and at Eaton’s Redwood Inn, on West Chicago Street.
Larry Mascolino of CoinFlip, one of the operators of these kind of machines, said the company founders saw a need for an easy, convenient way for the average consumer to get involved.
The company rents space in businesses like Elgin’s Redwood Inn where it has its machines for $100 a month and sometimes shares profit with the location’s proprietor, Mascolino said. CoinFlip charges a 6.9 percent transaction fee.
The company, which also has machines inside a Naperville Vape shop and the St. Charles bar Rookies, looks for places that are open long hours, if not all day, he said.
Competitor Digital Mint mostly locates in currency exchanges and “places where people are used to doing transactions,” said company co-founder and president Marc Grens.
He notes that the Elgin location is not far from the Grand Victoria Casino. The company takes a transaction fee of 5 to 12 percent, depending on the amount. Grens compares it to the exchange rate model for currency.
Use of digital currencies have been tied to criminal transactions such as paying off ransomware attacks on computers and laundering money related to drug dealing, illicit sex and human trafficking.
However, spokesmen for the Elgin police and the Chicago office of the FBI said they have not had reports related to bitcoin or the local machines.
Grens said Digital Mint requires registration with a photo ID and cell phone number. Its daily ATM limit is $8,000.
Mascolino said people have to register to obtain digital wallets and with online exchanges, so there is information authorities could access by warrant to track. CoinFlip has different levels of security based on the amount purchased.
When buying up to $500, purchasers must input their cellphone numbers. Amounts between $500 and $3,000 require a registration and a Social Security number. If someone is buying more than $3,000 worth of digital currency, they must put a state-issued ID up to the machine’s camera and pose for a photo.
Naperville vape shop manager Jay Gadhiya said he was eager to get a machine after he was approached by CoinFlip and researched the market. “This is the next movement,” Gadhiya said. “I wanted to get ahead of the crowd. I saw it coming.”
The machine was installed last May and stands adjacent to a regular ATM machine.
“It was super slow at first; now I get 50 people a week,” Gadhiya said.
Northern Illinois University’s Gunkel describes cryptocurrency as “a kind of virtual cash that operates without the need for trusted third-party intermediaries like a central bank, a government treasury, or credit card company.”
As with the stock market or any other financial transaction, Grens said people should research digital currency before buying.
“We’re in the second inning of the maturation of an industry,” Grens said.
Cryptocurrency is the term that encompasses any of the growing number of digital currencies such as bitcoin, the oldest and most widely-known type.
While bitcoin has been around since 2009, interest in the cryptocurrency sparked in December when the price of coin peaked at almost $20,000 after starting 2017 at less than $1,000. On Friday, the price dropped and settled at just over $9,300 per coin.
“Cyptocurrency is a form of decentralized digital money where cryptographic techniques are utilized to control the generation of units of the currency and to verify the transfer of funds,” Gunkel said.
Mascolino said underlying technology known as the blockchain makes bitcoin special. He describes it as a type of spreadsheet that tracks every transaction on the network.
“The genius of the blockchain design is what makes bitcoin inherently valuable and it has many different applications outside of currency. Other projects apply the blockchain to data storage, programmable contracts, and artificial intelligence,” Mascolino said “The world will be very different in the coming decades, as the exciting potential of this new technology unfolds.”