Turning physical cash into digital coins has become easier than ever in Toronto, now that the city has a Bitcoin ATM.

The city already has a substantial community built around the ‘cryptocurrency’, says Anthony Di Iorio, executive director of the Bitcoin Alliance of Canada, and the ATM is just another way to bring Bitcoin to the masses.

“It’s an easy way for people to get into Bitcoin through something they’re used to,” said Di Iorio, who will get a commission from each transaction executed by the machine.

Bitcoin is a digital payment system that uses a complex “cryptographic” or secure computer algorithm. It was introduced in 2009 by a software developer or developers using the pseudonym Satoshi Nakamoto.

It isn’t regulated by any government’s central bank and it isn’t backed by any commodity like gold or silver. That makes many wary of the currency. It is legal but was linked to the illicit Silk Road online black market which was shut down by the FBI last year.

Because there’s a fixed number of Bitcoins in existence, their value fluctuates on exchanges.

Users keep their digital coins in virtual wallets which, unlike bank accounts, aren’t linked to personal information. Bitcoins can be traded or spent without a third party, so there’s no fee for using them, as there would be with a credit card.

A record of every single Bitcoin transaction ever made can be viewed online, and a whole slew of new Toronto transactions will soon be added to the register if Di Iorio’s ATM is the success he hopes it will be.

Located at Bitcoin Decentral, a new co-working space at King and Spadina, the new machine requires users to feed cash in – the machine doesn’t accept debit – and the ATM gives a quote for how many Bitcoins that money will buy.

The price will fluctuate depending on the Bitcoin market. On Monday afternoon, the Canadian price for a Bitcoin was $905.97 online.

In a few weeks, the ATM will also allow users to sell their Bitcoins in exchange for cash, Di Iorio says.

Di Iorio’s certain the new machine will be a hit. Toronto’s Bitcoin community is booming, he says. The only other Canadian Bitcoin ATM – located in Vancouver – has seen massive success since it was unveiled in late October, he adds.

The currency seems to be generating buzz. As Di Iorio explained some of the ATM’s features to a Star reporter recently, three young men walked into Bitcoin Decentral, hoping to see the new gadget for themselves.

“I personally think there’s a lot of potential,” said Nadeem Chopra, who already owns Peercoins, another cryptocurrency.

But Chopra says he’s not sure if he’ll be using the new ATM any time soon.

“I don’t know if I’ll be buying Bitcoin,” he says. “I want an investment and it’s already kind of taken off (in terms of value).” Bitcoin was trading as low as 30 cents U.S. in 2011.

The machine is just one part of Di Iorio’s plan to build in Toronto’s Bitcoin community. He’s also working to get more bricks and mortar businesses to accept the cryptocurrency as payment.

“It makes sense for a merchant to start accepting Bitcoin,” he says. “It’s lower cost. They can get attention for being the first in their industry.”

Thousands of online stores around the globe accept the digital funds, but bricks and mortar retailers are just starting to pick up on the trend.

In Toronto, Ark Army Surplus on Wilson Avenue and Smoke Burbon Bar-B-Q on Harbord Street accept Bitcoin as payment.

Toronto advertising agency hqvb announced in December that they would start taking Bitcoin as payment.

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“We thought that it would be good to do it for a couple of different reasons,” says Andy Shortt, the agency’s creative director. “One, it’s interesting. Two, we’re a fuller thinking industry, and as such we must be able to understand the nuances in how the digital world is changing.”

As popular as Bitcoin is now, Di Iorio says it’s just the beginning.

“It will be the way payments are done in the future,” he says confidently.

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