Australia's first bitcoin automatic teller machine has appeared in a Westfield shopping centre as the virtual currency fights for mainstream legitimacy.

Bitcoin is a cryptocurrency that exists only in a digital format, not physical coins or notes. The difficulty in tracing bitcoin transactions has made it popular for shady online deals, but a growing number of legitimate businesses – both online and in the real world – have also started accepting payments in bitcoin.

Australia's first Bitcoin ATM, in Westfield on Pitt Street in Sydney's CBD, lets users trade the virtual currency for Australian dollars.

Australia's first bitcoin ATM, at Westfield on Pitt Street, in Sydney's CBD, lets users trade the virtual currency for Australian dollars. It also lets people buy bitcoins and transfer them to their digital ''wallet''. At present one bitcoin is worth approximately $550 but the exchange rate fluctuates wildly – peaking at $1350 last November and then plunging as low as $280 in February. bitcoins can be broken down to eight decimal places to allow for small transactions.

The world's first bitcoin ATM appeared in a Vancouver cafe in October. The backer of Australia's first machine, ABA Technology, plans to install ATMs in other Australian capital cities soon, and aims to have 100 machines around the country by 2015 and more than 500 globally by 2016.

Controversy still surrounds the creation of bitcoin almost six years ago and the cryptocurrency has met with a mixed reception from financial institutions and regulators around the world. Former US Federal Reserve chairman Alan Greenspan described bitcoin as a bubble with no intrinsic value. Meanwhile Australia's Reserve Bank governor Glenn Stevens expressed cautious optimism about the potential of cryptocurrencies.

The past 12 months has seen a spate of thefts, with the virtual heists claiming bitcoins worth millions of dollars.The bankruptcy of major bitcoin exchange Mt Gox has also cast a shadow over the currency's future. The National Australia Bank recently announced plans to cut ties with business customers who primarily traded in cryptocurrencies, planning to close their accounts next month.