San Diego gets its first Bitcoin ATM - CBS News 8 - San Diego, CA News Station - KFMB Channel 8

San Diego gets its first Bitcoin ATM

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SAN DIEGO (CBS 8) - The Bitcoin craze comes to San Diego, with the city's first-ever digital currency ATM.

The newly unveiled machine allows users to exchange cash for Bitcoins -- that's if they can afford it.

With this  machine, you give it money, and it converts the cash into a software-based online payment system where a code on your cell phone opens your virtual wallet.

"Bitcoin is a way to make person-to-person payments without interface. And so what I mean by 'interface' is you have no corporations, no banks or politicians that can interfere with your free association with other people," Bitcoin Merchant CEO Steven Michaels said.

With less regulation, the cost of doing business drops, which is why businesses like Downtown Johnny Brown's now accept Bitcoins. But that less regulation is also what makes Bitcoins controversial. Critics argue they make it easier to sell drugs and launder money, and recently a major Bitcoin exchange went under, making investors' money there worthless.

"Just like banks, you have to be concerned about who you deposit your funds with," Michaels said.

Michaels believes the limited supply of Bitcoins will eventually drive the price up, making them a good long-term investment. But since a spike in the price last December to just over $1,100, the value of Bitcoins have been dropping, and now stand around $430.

More than 100 businesses in the county accept the virtual currency, and starting Thursday there are 6 Bitcoin ATMs, with plans for more.

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