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Two Portland Bitcoin ATM Operators Battle for Control

Thursday, November 20, 2014

 

Photo Credit: iStock

Portland’s tech community has spawned two competing Bitcoin ATM companies, both vying for their own dominant piece of a global market for virtual money.

Introduced in 2008-09, Bitcoin, an obscure digital “currency” has been embraced around the world by countless tech-enthusiasts, hackers, coders and everyone inbetween. This alternative to traditional money is a hybrid of a commodity, traded on the open market — like shares of stock — and also a currency, like the U.S. dollar, despite not being issued by a national government. A bitoin is a purely digital object, it and has no physical form but can be traded for goods and service or converted into cash. Depending on the demand in the market, a single bitcoin can be worth as much as several thousand dollars, or as little as nothing.

“Bitcoin is a great tool to pay for things, or for investment,” one Portland Bitcoin broker said.

The first bitcoin “ATM” was installed in Vancouver, British Columbia in 2013. Shortly thereafter a Portland-based firm, BTC Mint US, began crafting their Bitcoin kiosk and eventually installed it in Southeast Portland. Then in November of this year, another company, BitcoinNW, installed its own high profile Bitcoin ATM inside Pioneer Place Mall.

The two Portland-based companies have radically different ideologies.

Josh Fisher, 28, is the CEO of BTC Mint US, a company he co-founded with his brother. Fisher has a fundamental disdain for physical cash — which he refers to as “fiat currency.” He said one of the biggest philosophical differences between BTC Mint US and other companies, like BitcoinNW, is that Fisher doesn’t want his business to deal in U.S. dollars at all.

“It’s more of a difference in just core principles,” Fisher explained. “I would prefer to make (profits in) Bitcoin, and he would probably prefer to profit through cash.”

Fors, the founder of BitcoinNW, lacks Fisher’s ideological zeal. Instead, he views his Bitcoin startup more as a way to earn a living. He’s much less suspicious of the governments efforts to regulate the new digital phenomena than Fisher.

“Like most innovations, Bitcoin is a new, advanced technology that no one has ever seen before and I believe the government is working to gain a better understanding,” Fors said. “If they want to regulate, then they will regulate.”

Regardless of how much exposure the downtown BitcoinNW ATM may garner, Fisher said he feels that putting an ATM in the location that BitcoinNW chose to install theirs is the wrong philosophical direction for Portland’s Bitcoin community. The purpose of digital currency is to have an open source, independent, (relatively) anonymous financial service, Fisher said - not to replace one form of form of corporate banking to another.

Fors confirmed the BitcoinNW ATM was manufactured and installed with software developed by Robocoin; much to the chagrin of Fisher and his colleagues. Fors also said his firm still has a relationship with the controversial company after the launch of his machine.

“They help with upgrades, and advice when I have questions about the software,” Fors said. “So far I’ve had a good rapport with Robocoin and I'm happy with their machine.”  

According to Fisher, on the other hand, Bitcoin is decentralized and unregulated for a reason. Some consumers use Bitcoin specifically to avoid security issues, like data breaches. Fisher said his company can be trusted to ensure the data it collects from its customer because it has control over its own servers, while BitcoinNW outsources the responsibility and hands over all of the data its ATM collects to a third-party.

“We agree that security and privacy are very important.” Fors said. “We only collect the information that’s required to meet state and federal regulations. (We) do not share that information with anyone, unless required by law.”

Fors added that the agreements BitcoinNW reached in order to keep its ATM operating at its current location is confidential and he would be unable to comment.

Fischer also expressed a degree of annoyance with the government introducing new regulations for the digital currency.

Fors, however, said regulation is part of the cost of doing business.

“Like most innovations, Bitcoin is a new, advanced technology that no one has ever seen before and I believe the government is working to gain a better understanding,” Fors said. “If they want to regulate, then they will regulate.”

According to Fors, there are a number of investors holding equity in BitcoinNW who wish to remain anonymous, and he respects their privacy.

“Primarily, they have given me great advice with contract negotiations, starting the company and making sure everything is operating smoothly,” Fors said of his partners.

Now, Fors is focused on signing up more Portand-area businesses to accept Bitcoin as a mode of payment. Fischer is doing the same, adding that he’s looking to sign a chain of adult bookstores whom credit card companies are wary of providing their services to.

Ultimately, it’s the free market that will decide which entrepreneur is right.

 

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