News that bitcoin ATMs are being installed in larger numbers around Australia shows the growing popularity of the online currency, at a time when we are using cash less and less. Bitcoin joins the thousands of currencies around the world that are generally known as ‘complementary’ to the official monetary system. But it is one of the most successful. A big draw for bitcoin users is that it is supposed to be reasonably anonymous. Once a person has signed up to the bitcoin system, the blockchain, they can set up any number of ‘addresses’ and use them for sales and purchases. Another reason for its popularity is that it cuts out the middleman, namely, the banks. Banks charge their customers to withdraw and manage their own funds, whereas bitcoin users deal directly with one another. For risk takers, the rapid rise and fall in bitcoin’s value creates opportunities to buy or sell the currency for great profits. Bitcoin was invented by a group of programmers for use on the internet. They set up a decentralised register to record transactions between parties, which they called the blockchain. As the currency was not created by banks or distributed by governments, it did not have the status of ‘legal tender’ that official coins and notes have. But it can be used to buy real goods if the seller accepts them in payment. Hence the arrival of bitcoin ATMs. Bitcoin owners can exchange their cyber currency for cash at these machines, allowing a seamless transition from virtual to real money. It must only be a matter of time before the government starts asking questions about earnings and more importantly, taxes for bitcoin turnover. It was the twin hurdles of taxes and competition with banks that tripped up most other complementary currencies. It is interesting that bitcoin ATMs are springing up at the same time that we hear of bank branches closing in our region. Branch closures are seen by many as a sign of the times, as the number of people using online banking rises. But it’s also a sign of the declining use of cash. If the apparently unstoppable rise and rise of bitcoin suggests that the public wants privacy, cheaper transactions and more convenience, the established banks may have a fight on their hands. Digital natives may end up using and trusting bitcoin rather than banks.

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