South Korea Launches its First Two-Way Bitcoin ATM

Jon Southurst (@southtopia) | Published on March 9, 2014 at 10:25 GMT | Bitcoin ATM, Companies, News, Technology

South Korea is the latest country to introduce its first bitcoin ATM. Not only is the machine produced locally by a home-grown company, it is also two-way, meaning users can also sell bitcoins and withdraw cash.
The machine, which officially began operating yesterday, sits in the Coffee Sedona cafe in one of Seoul’s largest shopping malls, the Coex Mall which is also close to the Coex Intercontinental Hotel and a casino in the city’s world famous Gangnam district. For those wanting to buy bitcoins, it accepts cash
and credit cards(note: the card slot on the machine is a dummy slot, normally used for non-bitcoin ATMs).

It is the result of a joint venture between bitcoin exchange Coinplug and Nautilus Hyosung, the number one ‘regular’ ATM manufacturer in Korea, which also has the world’s fourth-largest market share. Coinplug’s Richard Yun said the machine’s launch was well attended by the Korean media.
This video (in Korean) demonstrates how transactions are made in both directions using a smartphone wallet.

Security and compliance

The machine also has one other key feature, or lack thereof: unlike other two-way bitcoin ATMs, such as the one produced by US company Robocoin, the Coinplug machine does not collect any identification or biometric information from users. Robocoin, as what it calls a security feature, requires photo ID and takes a palm vein scan of users, although the company says this information is not uploaded to a database anywhere and that palm vein scans function like a secondary PIN, representing the “most anonymous biometric on the market”.
Coinplug’s machine does have some restrictions of its own, though. Yun said the machine is set to allow transactions at a maximum of (the equivalent of) $200 each, and a maximum of three transactions a day per wallet address. This is less than what is typically allowed by Korean banks for ATM transactions, which is $1,000 per transaction and $6,000 per day.
Other popular bitcoin ATM options, like the machines produced by Lamassu, accept cash and dispense bitcoins only.

Yun said the company was able to produce a two-way machine thanks mainly to the South Korean government’s light touch approach to bitcoin regulation so far. The government, like many others, has declared bitcoin is not a currency and will not regulate it, and has not made any attempts to restrict its use. Should the machine prove successful in its homeland, Coinplug will be looking for interested buyers outside Korea.
Coinplug has been busy in Korea this year, recently launching three separate Android bitcoin apps for merchants and traders, and a wallet app for everyday users. The company has also been funded so far 50% each in bitcoin and fiat currency by its Silicon Valley-based partner, new venture capital firm Silverblue.
ATM image via Coinplug

Overstock Tops $1m in Bitcoin Sales, Projects Up to $20m By Year’s End

Tom Sharkey | Published on March 4, 2014 at 23:27 GMT | Coinbase, Merchants, News

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It has been less than two months since e-commerce giant Overstock.com began accepting bitcoin payments on their website, and the online retailer has already surpassed $1m in total sales.
Overstock’s CEO Patrick Byrne confirmed the company’s plans to embrace bitcoin back in December, and bitcoin payment processing officially went live on Overstock.com on 9th January.
Byrne spoke with CoinDesk about its $1m milestone, asserting that while the initial surge of bitcoin sales did subside, there has since been steady growth in bitcoin payments:

“In the first day there was an enormous surge of bitcoin sales, but we’ve also seen a gradual building of bitcoin sales in a week-by-week basis.”

The initial projections for sales processed with bitcoin on Overstock.com this year was set at $3-5m, but this figure has since increased dramatically, according to Byrne.
The CEO now predicts that Overstock will see a total of $10-15m in bitcoin sales this year, and suggested that this number could reach as high as $20m if bitcoin sales maintain their current growth rate.

New data

Overstock partnered with Coinbase to process bitcoin payments, and together the two companies have compiled and released data that shows the spending habits of bitcoin users on Overstock, notably comparing them to credit card users.
The findings show that customers who use bitcoin as a payment method spend on average $58 (34%) more on their orders than customers using credit cards.

Byrne says that Overstock has reaped the benefits of accepting bitcoin as a payment method, most notably in regards to eliminating chargeback fraud from credit card payments and reducing payment processing fees:

“Bitcoin payments have helped us avoid fraud in the form of chargebacks with credit cards, and we’re also able to get paid faster than when payments are processed with credit cards.
It takes three days for payments to finalize with credit cards, and with bitcoin we can get paid immediately.”

Market effects

While Overstock is credited as the first major online retailer to accept bitcoin payments, they’re not alone when it comes to reputable companies embracing bitcoin. TigerDirect began accepting bitcoin payments in late January, and companies like Virgin Atlantic and Reddit have helped further legitimize the digital currency as a convenient and secure payment method.
Speaking on the recent news of Overstock’s $1m bitcoin sales milestone, Coinbase noted that while they’re excited about the growing number of transactions being processed with bitcoin, they’re certainly not surprised:

“We are more gratified than surprised with these recent milestones, as they illustrate our belief that we are near a tipping point for broad merchant and consumer adoption of Bitcoin.”

Byrne hopes that the news of Overstock surpassing $1m in bitcoin payments will continue to build the currency’s credibility and adoption rates, noting that many customers are switching from competing commerce sites to shop with bitcoin on Overstock:

“I’ve seen the bitcoin community really embrace Overstock and I’ve read about many cases of our customers coming over from Amazon specifically to shop using bitcoin.
I think that bitcoin payments will account for several percent of all online transactions in the next year or two, and when this happens, Amazon will be forced to start accepting bitcoin on their website.”

With the amount of sales being processed with bitcoin steadily growing on Overstock, Byrne noted that the company has recently changed its business model and will start to hold “5-10% of [their] processed bitcoins in reserves.”
Given the option that Coinbase offers its merchants to immediately convert bitcoins to fiat currency, this move is a symbol of Overstock’s confidence in the principles of bitcoin and its utility as a means for buying goods and services online.

KnC and Chicago Sun-Times Launch Pre-funded Bitcoin Wallet

Nermin Hajdarbegovic | Published on March 3, 2014 at 11:09 GMT | KnCMiner, News, Wallets

Mining hardware maker KnCMiner has launched its first bitcoin wallet, with an interesting twist.
As part of the launch, the first 96,000 downloads will be awarded with a few bucks to spend.
The KnC Bitcoin Wallet app is available on the Google Play Store and it’s free. Needless to say, there’s no app for iOS or Windows Phone. The wallets are pre-funded and it appears that the first 1,000 downloads will be awarded with $5 each, while the next 95,000 wallets will get $1 each (at the current BTC/USD exchange rate).

Bitcoin wallets for the masses

In order to appeal to a wider audience, KnC has teamed up with the Chicago Sun-Times, which is supporting the launch with ads and sponsored content in the form of a “Bitcoin for Beginners” guide.
KnC co-founder Sam Cole said the move was part of the company’s effort to educate a wider audience about the possibilities of Bitcoin:

“KnC wants to share information about this evolving technology with the public. Most people don’t understand what exactly Bitcoin is or how they could benefit fromusing KnC Wallet in their daily life. We’re trying to change that.”

Wrapports Chief Technology Officer Josh Metnick said the Chicago Sun-Times was an obvious choice, as the paper already embraced bitcoin. Wrapports publishes the Chicago Sun-Times, the Chicago Reader and several dozen smaller publications in northern Illinois and Indiana.
“As a media company in today’s environment, it’s crucial for us to stay engaged with new forms of commerce like Bitcoin. Our initial Bitwall experiment proved successful, and we are going to keep pushing the boundaries across all types of technologies,” Metnick said.
The big hope is to equip 100,000 Chicagoans with an active bitcoin wallet, Metnick told us.

Teething problems

According to the Google Play page, the wallet is currently in version 0.9.1 and it has been installed just under 500 times.
The company’s wallet can send and receive bitcoins using phone contacts and it has an integrated QR scanner to dynamically convert BTC to local currency. However, KnC admits a couple of limitations – for example its NFC payments are still not working.
The app supports all Android versions back to 4.0 Ice Cream Sandwich, so it should work on the vast majority of devices launched over the last two to three years.
The first version of the app was uploaded on 21st February to a mediocre response. The average review score is 3.7 and some users are reporting several issues. However, KnC has acknowledged these negative comments and promises to iron out any kinks soon.