A Better Way to Buy Bitcoin?

lamassu_bitcoin_atm26 Mar 2014 / The New Yorker – When Zach and Josh Harvey opened a guitar store in Tel Aviv, in 2006, they only sold instruments made by musicians who viewed the pieces as works of art. To the brothers, who were twenty-six and thirty-two at the time, the idea of plugging in a mass-produced electric guitar wasn’t in keeping with the spirit of rock and roll. But their idealism was expensive. The instruments the brothers sold were made by little-known foreign manufacturers, and the Israeli government’s regulatory branch requires safety tests for many products when they are imported for the first time.

By 2011, the brothers had heard about Bitcoin, the digital currency produced through a computerized process called “mining,” known for its ability to facilitate anonymous online transactions. Bitcoins are generally unregulated, a fact that appealed to the Harveys, who were fed up with the government’s role in their business. They began accepting bitcoins at their store. In December, 2011, they decided to move to the United States. They settled in New Hampshire, a popular destination for Bitcoin-loving advocates of small government.

By then, Bitcoin had begun attracting mainstream attention, and the Harveys began to see a business opportunity in the currency itself. (In October, 2011, Joshua Davis wrote about Bitcoin and its mysterious creator in the magazine.) In February, 2013, Zach unfurled a plastic tarp on the floor of his new guitar store in Manchester, New Hampshire. Using materials from Home Depot, he started to assemble and paint a wooden prototype for a machine that would sell bitcoins. Such machines are often called Bitcoin A.T.M.s, which is a misnomer: they don’t allow people to deposit bitcoins or withdraw them from their own accounts. Instead, you put a few dollars into the Harveys’ construction, watch as they are converted into bitcoin, and tell the machine where to deposit the resulting encrypted-currency funds. (Typically, the bitcoins are deposited into an online account called a “wallet,” where they can be used to make purchases.)

The Harveys unveiled their prototype, programmed by Josh, at the Liberty Forum, a conference for anarchists and libertarians just a short drive from their guitar store. By that time, bitcoins cost thirty dollars each—up significantly from the twenty-five cents they cost when the Harveys first began accepting them in their Tel Aviv store, several years earlier. After the conference, the brothers closed the guitar shop and set up a new company called Lamassu, named after the Mesopotamian sculptures of winged lions meant to protect the ancient civilization’s wealth and commerce….. Read more


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