MOUNTAIN VIEW (CBS SF) – The arrival of Silicon Valley’s first Bitcoin ATM in Mountain View may not herald the dawn of a virtual currency for the masses.
The machine to be unveiled Thursday at an e-commerce convention known as the Bitcoinference returns Bitcoin numbers on deposits of ordinary, government-backed currency.
“If you have the local scrip, like US dollars, and you want to convert it to Bitcoin,” explained Georgetown University associate finance professor James Angel, the ATM will “take your money and spit out a Bitcoin number for you.”
Robocoin, the Las Vegas company behind the new machine, already operates two other Bitcoin ATMs, one in Texas and the other in Canada.
Angel predicted the demand for more such machines would not be tremendous, despite the interest among venture capitalists to develop the virtual currency.
“We’ll see other applications roll out. We’ll see other Bitcoin ATMs and more businesses adopt it, but whether it ever achieves critical mass depends upon a killer app that everybody wants to use. And so far I don’t see that killer app on the horizon.”
Bitcoin users must still understand things like private keys and virtual wallets, or the difference between offline and online storage, Angel said. Even the ATMs are fairly complex, since Robocoin must be able to identify its customers in order to comply with money laundering laws.
“It’s still a techie product. It’s still too complicated for the masses.”
Whoever develops the killer app that makes Bitcoin a household word will have to figure out what problem Bitcoin actually solves, Angel said.
“What am I going to use it for, you know? What does it do better than other solutions?”
If an answer is not forthcoming soon, Angel said, Bitcoin could go the way of Pets.com.