Bitcoin Exchange, a prosaically-named Singapore-based currency exchange for Bitcoins, has just announced the acquisition of a Bitcoin ATM machine made by Lamassu.
It promises to exchange currency notes from over 200 countries to Bitcoins in 15 seconds. The location of the ATM is yet to be confirmed.
Bitcoin ATMs have been in operation since November 2013, with the first machine installed in Vancouver, Canada. The premise of Bitcoin ATMs is simple: to make the process of exchanging cash for Bitcoins quicker, and with less hassle. Currently, buying and selling Bitcoins could involve a convoluted journey through money transfers and waiting time for verification, as someone found out when he tried to arbitrage between different Bitcoin exchanges for a profit.
Does this mean that Bitcoins are going mainstream? Will we be able to transact in Bitcoins as conveniently as we do now with cash or credit card? There are some indications that Bitcoin is rapidly creeping into people’s consciousnesses, with a poll by Bloomberg showing that nearly 42 per cent of Americans correctly identified Bitcoin as a cryptocurrency. It is a safe assumption that awareness about Bitcoin among Singaporeans is also high due to technology penetration, although it could be lower in comparison to the 42 per cent of the US given that Singapore still lacks the infrastructure for Bitcoin transactions.
That said, there are still some rather significant obstacles for Bitcoin to be accepted as a legitimate currency in the eyes of the public. Chief of these is the fact that Bitcoin is pretty much unregulated, with opportunities for less-than-honest individuals to make a quick buck off other more scrupulous users.
For instance, within the first few weeks of the opening of the world’s first Bitcoin ATM in Vancouver, an enterprising merchant set up shop right next to the machine, offering lower transaction fees for exchanging Bitcoins through him. In the end, the operator had to hire someone to stand guard beside the machine, shooing away competitors as well as educating users on how to access their Bitcoin wallets. Incidents like this put a damper on innovation and reinforces the public perception that when it comes to Bitcoin, anything goes.
Such negative perceptions of cryptocurrencies can been further bolstered by the rise of cryptocurrency upstarts such as Dogecoin, with the attendant risk of fragmentation and uncertainty. Currently, Cryptocoincharts counts 155 cryptocurrencies in its list, with 42 of them with a market capitalisation of greater than US$10,000. Although the list shows that Bitcoin is still top dog, dominating the cryptocurrency chart with US$10 billion out of a total of US$11 billion in market capitalisation, the exponential rise of Dogecoin (launched in December, it is now fifth by market cap) underlines a worrying trend, that Bitcoin’s primacy can and most likely will be challenged in the future.
So, what does this say about the acceptance of cryptocurrencies in Singapore and beyond?
While public awareness has been growing steadily and will continue to grow even faster in the future with the visibility of physical ATMs, the usage of Bitcoin in Singapore still lags behind many other countries such as the United States and China. In addition, factors like the fragmentation of cryptocurrencies and the lack of regulation will pose problems for its wide-scale adoption, which is essential for cryptocurrencies to be seen as more than a geek’s toy.