Israel’s first ATM for obtaining bitcoins debuted on Sunday evening at the Bitcoin emBassy, a non-profit group devoted to spreading the virtual currency’s gospel.
The bitcoin ATM functions differently from those consumers are used to. Anyone who is interested in buying bitcoins puts cash into the machine, and it credits their virtual wallet with the currency.
“I am proud that the embassy has made the first bitcoin vending machine available in Israel.
This is part of our mission, to make bitcoins accessible to the general public,” said Ayal Segev, from Bitcoin emBassy.
The machine will operate through Bits of Gold, a company that specializes in bitcoin services for the Israeli market.
The Israeli Bitcoin Association says hundreds of Israeli businesses already accept bitcoins.
Bitcoin was created as a sort of virtual cash in 2009 by a mysterious Internet guru who went by the name of Satoshi Nakamoto.
In March, Newsweek alleged that California resident Dorian Nakamoto was the man behind the currency, though he denied any connection.
Since its inception, the currency’s value has been extremely volatile. It had risen from $15 at the start of 2013 to a peak price of over $1,150. On Sunday, it was trading at around $447.
People can purchase bitcoins through online exchanges, but there are often fees involved in the process.
The difficulty of assessing the trustworthiness of an exchange has proven to be an obstacle.
Mt. Gox, one of the biggest bitcoin exchanges sites, declared Bankruptcy in February, and said it had lost hundreds of thousands of bitcoins, worth millions of dollars.
Around that time, the Bank of Israel issued a warning
to consumers on the dangers of buying bitcoins and other online currencies.
In addition to their volatile nature, Bank of Israel had said, such currencies are not considered legal tender – meaning nobody has to accept them as a form of payment.
The lack of financial oversight meant that, like cash, they could be used for illicit activities, such as money laundering and funding terrorism
On Tuesday, the US Internal Revenue Service published guidelines classifying the bitcoin as an asset – not a currency – for tax purposes.