Yikes! What is a Bitcoin, or a BTM for that matter? What is cryptocurrency? Simply put it is digital money created from computer code. It involves the use of encryption techniques to regulate the generation of units of currency and verify the transfer of funds. Bitcoin and Ether are two of the best known types. What is a blockchain? A blockchain is a type of decentralized database or ledger that keeps records of digital transactions. Unlike traditional databases that use a central administrator to ensure the system is balanced, a blockchain has a network of replicated databases, synchronized through the internet and visible to anyone within the network. Blockchain networks can be private with restricted membership, like an intranet, or publicly accessible to everyone, like the Internet. What is a BTM? BTMs are physical kiosks that are connected to the internet allowing users to insert traditional currency in exchange for Bitcoins given in the form of a paper receipt. In addition, users can also use the machine to move money around on the blockchain. Source: BlockGeeks

Walk into the Amante coffee shop at 2850 Baseline Road on any given morning, and what looks like an automated teller machine sits along one wall.

Throughout the day, a handful of people use it. One is a techie, another is a well-dressed middle-aged couple. But this is not your grandmother’s ATM. It’s a Bitcoin teller machine, a portal into the brave new world of cryptocurrency.

Some call this new kind of money the grandest experiment of our time. Others fear its rising power and the rest of us have no idea what the heck it is.

Boulder’s Eric Weissmann was fascinated early on with the potential of digital currency. And when the opportunity arose to own and operate Bitcoin teller machines, or BTMs, he jumped in and founded Modern Tender. Weissmann thought the architecture of the code, the blockchain, had the potential to transform currency markets.

“I was interested in Bitcoin and thought the blockchain technology was revolutionary, so I wanted a foothold in the space. We reached out to Amante because we wanted a location that was upscale, easily accessible, and attractive to early adopters and the tech demographic,” said Weissmann.

BTMs are still largely a rarity. There are 13 statewide, including two in Boulder — Weissmann’s at Amante Coffee and a second machine in the tech accelerator Spark Boulder at 1310 College Ave.

The two BTMs in Boulder were installed in February of 2015. The Spark machine is owned by Aurora-based XBTeller. Officials there could not be reached for comment.

Operating outside the traditional banking system with no regulatory oversight, BTMs have experienced a surge in use as more people turn to cryptocurrencies as a haven from political instability and distrust of government-backed currencies.

For baby boomers, the concept of mobile money meant automatic teller machines (ATMs). Moving forward the millennials have redefined the idea of mobile by pushing all financial operations online, and in the process, they have created entirely new types of currency.

Cryptocurrency, at its most basic, is digital money created from computer code.

This system emerged after the 2008 stock market crash. Bitcoin was the first on the scene and was designed as a means to bypass third party agencies and central banks.

As a rising number of users participated in Bitcoin’s peer-to-peer network, the need for a more efficient means of buying and exchanging Bitcoin grew with it. Prior to the introduction of BTMs, acquiring Bitcoin was complicated and lengthy.

But BTMs are changing that. Just like traditional ATMs they provide efficient access to the currency on-the-go.

FT Technology Reporter Sally Davies in a recent article compares the relationship between Bitcoin and blockchains to that of the internet and emails. According to Davies, blockchain is to Bitcoin, what the internet is to email. Blockchain is the broader electronic system from which you can build different applications, like Bitcoin.

Using BTMs isn’t cheap. The machines charge a fee on each transaction. Similar to traditional ATMs, these transaction fees vary between machines depending on the operating company that controls it. But BTMs charge fees based on a percentage of the value of the transaction. Most traditional ATMs charge a flat fee.

The average BTM fee is 10 percent to buy Bitcoin and 6.3 percent to sell it, according to Coinatmradar, the first database created for Bitcoin ATMs. The steep fees, experts said, are due to legal fees and costs associated with converting Bitcoins to cash.

New Hampshire based Lamassu Inc., was the first to manufacture a Bitcoin teller machine in the United States. Weissmann bought one of its machines to put in Amante.

“In the past, Bitcoin has been quite difficult to acquire,” said Neal Conner, customer service manager for Lamassu Inc. “If you were obtaining it online, it needed to be through an exchange, and then approved based on documents submitted by the user, including the transactions made and proof of a bank account. To do all of that takes time, so when it comes to digital currencies users are willing to pay a little more for commission if they’re doing so instantly via machines.”

“The end-game scenario for cryptocurrency is that it is as easy to use as cash, if not easier, and that it is ubiquitous,” said Conner.

But Bitcoin is no longer the only cryptocurrency available. Upstarts such as Ethereum, Ripple, and Litecoin are up and running, and growing fast, according to CoinDesk, a market research firm specializing in digital currencies.

Worldwide, digital coins are valued at nearly $80 billion, but the value of the new currency swings dramatically. Just last month it peaked at $115 billion.

It’s that volatility that has added to debate within the financial community about how these currencies will develop and whether or not they are sustainable.

Most following the digital currency market believe that a crash is very unlikely. Sharp movements in a market during early stages of maturation is nothing new for cryptocurrency buyers who attribute the instability to the process of forming an entirely new asset class.

“If you think about the qualities currency must posses, process will tell you that it is something divisible, durable, uniform, widely accepted, and in limited supply. I think that cryptocurrency represents something that has all of those traits and does so better than any (traditional) currency today,” said Dan Briere, an analyst with New York-based Chainalysis. Chainalysis provides software to government agencies and financial institutions involved in banking Bitcoin or investigating activity on the blockchain.

But there has also been plenty of controversy surrounding the digital currency.

In the early years, blockchain technology was used for the exchange of illegal substances or other criminal enterprises. The secretive nature of the system meant that users were not required to disclose their personal information when creating a personal address. Therefore such exchanges as the notorious drug channel, Silk Road, were initially hard to trace and terminate.

“The notion that Bitcoin is defined by illicit activities is a general notion that we are trying to get the public eye away from. So far, there is already $5 billion circulating in cryptocurrency and it is growing exponentially,” said Briere.

And the increase of BTM use in Boulder is on par with that national trend.

Modern Teller’s BTM at Amante Coffee has more than doubled in transaction volume during the second quarter of this year, something Weissmann credits to the growing acceptance of the currency.

Amante Coffee Shop owner Jordan Karp, said his shop has benefitted from the machine.

“In the beginning, the percentage of people using Bitcoin was low and I wasn’t sure if customers would accept the concept. The idea that you could actually go and buy or sell a Bitcoin was still foreign in practice,” said Karp.

Karp’s faith in the technology convinced him to approve the proposal for a BTM in Amante. And in the two years since its installation, Amante has reaped substantial benefits.

“It was slow on the uptake but has gained a lot of attention, particularly over the last year. The BTM has brought a lot of foot-traffic into the space,” he said.

As the cryptocurrencies grow in use, how far they will develop is unclear. Paypal, for instance, began accepting Bitcoin in 2015 and other major companies are following suit.

Lamassu’s Conner said investors like to keep a portion of their money in Bitcoin, or other cryptocurrencies to protect their wealth and circumvent dominant central banks.

“We’re going to see what works now,” said Conner. “We need to keep marching forward.”