The last time you went to your corner bodega, perhaps you noticed an inconspicuous machine with a large, vertical screen, and a bill acceptor but no cash dispenser. Behold, the Bitcoin ATM.
Currently, there are at least 130 Bitcoin ATMs in New York City, and around 60 in Brooklyn alone. This kind of convenience opens up a new market for cryptocurrency. Unlike popular platforms like Coinbase, which require that a consumer purchase Bitcoin through their bank account online, these ATMs allow anyone with cash and a cell phone to purchase Bitcoin immediately.
Bitcoin is a digital currency with a fixed number of “coins” that are “mined” at all times by an algorithm, which allows for more of the currency to be released. We can think of mining as a way of processing any Bitcoin transaction. Bitcoin has no set price — it fluctuates based on supply and demand, so the prices set by ATM companies are determined in different ways.
The currency became widely known because of its use on the dark web by sites like Silk Road, a now defunct website known as an illicit marketplace for buying drugs that was shut down by the FBI in 2013. While Bitcoin has gained a reputation for being a novel kind of investment, the currency is also slowly coming into use in the physical world, with some stores and restaurants now accepting Bitcoin as payment.
Bitcoin ATMs are marketed by their creators as a way for unbanked populations to gain access to Bitcoin as both an investment strategy and a way of safely keeping funds outside of a banking system. For people without a bank account, this access is critical, and may be one explanation as to why many of Brooklyn’s Bitcoin ATMs are in neighborhoods like Brownsville and East New York. A 2013 study from the Urban Institute showed that almost 30% of Brownsville residents lack bank accounts.