South Street Head Shop Gets Bitcoin ATM

"It's been very busy," a manager told us.

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At the 6-year-old Philly Dream Shop down at 254 South Street, you can buy gigantic bongs, every variety of rolling paper known to man, and a Pringles can that’s actually made for keeping your secret stash a secret. And now, you can also buy thousands of dollars worth of the controversial digital currency known as Bitcoin thanks to a brand new Bitcoin ATM.

“It’s been very busy,” a manager named Naz told us on Monday afternoon. “People have absolutely been using it, and I’m planning on doing it, too.”

The Bitcoin ATM was installed last week by Dallas-based company Coinsource, and it’s one of only 14 or so Coinsource Bitcoin ATMs in the country and the only one in Philadelphia. There are four other Bitcoin ATMs in Philadelphia from other companies, including two on North Broad Street and one on 52nd Street in West Philadelphia.

If you’re like most people, you’ve almost certainly heard of Bitcoin but aren’t exactly sure what it is. Bitcoin is a form of digital money that is bought, sold, exchanged and hoarded on a financial network that exists on the Internet. There is a limited supply of Bitcoin — only 21 million Bitcoin “tokens” will ever be created — and the value of each token fluctuates, so, like with other financial networks, those who buy low and sell high can make a great deal of money, as many have done. Bitcoin expert and New York Times reporter Nathaniel Popper does a great job of explaining what Bitcoin is and what Bitcoin isn’t in this interview with Wharton.

To use the Bitcoin ATM at Philly Dream Shop, you input your smartphone number and then insert the amount of cash that you want to change into Bitcoin. Right now, one Bitcoin token is trading at about $435, and Coinsource takes a 7 to 8 percent fee from the amount of Bitcoin that you’re buying. The Bitcoin ATM prints out what Bitcoin users call a “paper wallet” (it’s a slip of paper with a unique QR code containing the keys to your account), and you can then use an app on your phone to scan the QR code and, voila, you’ve got Bitcoin. You can buy up to $3,000 worth of Bitcoin tokens at the ATM at one time, and like the vast majority of Bitcoin ATMs in the country, the one at Philly Dream Shop is a one-way street: You can only use the machine to buy Bitcoin; you cannot get out cash.

As Popper has explained in his reporting for the New York Times, Bitcoin is particularly popular with drug dealers, who often have large wads of bills that they can’t exactly stick in the bank and would rather not stuff under the mattress. But Bitcoin spokesman David Wachsman explains that there are plenty of legitimate reasons why people want to buy Bitcoin. “You can make a lot of money in this,” says Wachsman. “A year ago, it was worth $120 less than it is today, and this is also an ideal way to store your wealth. This is a very secure way to hold your money.”

Follow @VictorFiorillo on Twitter.