For a few hours it was possible in the halls of the U.S. Congress to buy the crypto currency that at least one Senator said should be banned.
In a hallway in the Rayburn House of Representatives office building Tuesday night, a gaggle of media encircled Colorado Democrat Rep. Jared Polis as he inserted his hand into a palm-reading device, and then placed a $10 bill into a refrigerator-sized purple kiosk. Out of the machine came a piece of paper with the unique code for 0.02 bitcoin. It was the first bitcoin ever purchased on Capitol Hill, at least from a machine that printed receipts.
The kiosk was an ATM owned by the startup Robocoin, a Las Vegas-based firm that sells machines for exchanging dollars for bitcoins, the stateless, cryptography-based digital currency that has enthralled libertarians, bewildered financial regulators, drawn the ire of establishment politicians. Typically it takes days and a certain amount of tech savvy to exchange dollars for bitcoins. With Robocoin, the process is complete in about 10 minutes. "I think that may be the fastest way in the world to get bitcoin,” said Robocoin CEO Jordan Kelley.
Rep. Polis helped organize the demonstration to dispel what he feels are misconceptions among some in government about the nature and promise of bitcoin.
“Healthy skepticism and some intrigue as well,” said Rep. Hank Johnson (D-Ga.) when asked what he thought of bitcoin after seeing the ATM at work. House Judiciary Committee chairman Rep. Bob Goodlatte (R-Va.) also made a stop by the event.
But Johnson’s “healthy skepticism” is a far cry from the outright contempt some in Congress have visited upon bitcoin, which critics worry could be used to facilitate black market trading (as it did in the now-defunct website Silk Road), money laundering and other illegal activity. In February, Sen. Joe Manchin (D-W. Va.) wrote a letter to regulators calling on the U.S. government to ban bitcoin “and prohibit this dangerous currency from harming hard-working Americans.”
Those comments—which Manchin has since walked back—are what inspired Rep. Polis to help organize Tuesday’s Robocoin demo.
“When I saw that serious politicians were talking about banning something, a concept that has great benefits for humanity,” said Polis, a tech entrepreneur before starting his career in Congress, “I decided to step in and show that there are those of us here that have a countervailing viewpoint: that alternative currencies enhance freedom, enhance economic opportunity, particularly for the world’s most disadvantaged, and can reduce transaction costs across our entire economy.”
Underneath the demo gimmick, the event served to highlight what bitcoin boosters see as the currency’s unique advantages and to dispel some of the murkiness surrounding a currency most closely associated in the popular imagination with the illegal online drug trade. As Polis noted in his remarks, “the currency of choice is still dollars” for greasing the wheels of illegal activity of any kind around the world. The amount of illegal activity funded by bitcoin is still a fraction of a fraction of that facilitated with good old-fashioned cold hard cash.
Bitcoin boosters hope the currency could one day help bring banking services to the poor by dramatically lowering the cost of a financial transaction, like cashing a check, a service for which the bankless poor currently pay a premium at check cashing shops. Biometric security features, like the Robocoin ATM palm reader, could actually make the cryptocurrency less anonymous and reduce theft by tying bitcoins to the individuals who own them.
As bitcoin has come to prominence in recent months, the big question for government has been “if the regulators should just wait and see or if they would want to ban it,” said John Russell, Robocoin co-founder and CTO. “I would encourage them to wait and see and watch what the community is going to be able to do.”