Here’s What Happens When a Bitcoin ATM Comes to Congress

Amid the spectacle, evangelists for digital currencies promote their earnest belief that the technology can help heal the world.

National Journal
Add to Briefcase
Dustin Volz
April 9, 2014, 7:34 a.m.

“Con­gress has long been a place where good, dis­rupt­ive ideas go to die,” quipped Rep. Jared Pol­is.

He was al­most 30 minutes in­to a news con­fer­ence Tues­day called to show off Rob­ocoin, the “world’s first bit­coin ATM.” But the Col­or­ado Demo­crat also rel­ished the op­por­tun­ity to tease some of his Chick­en Little col­leagues, who fret that di­git­al cur­ren­cies could des­troy fin­ance as we know it.

Mo­ments earli­er, Pol­is had likely be­come the first mem­ber of Con­gress to own bit­coin. This was after he some­what awk­wardly in­ter­faced with the Rob­ocoin ma­chine set up in the main hall­way of a con­gres­sion­al of­fice build­ing nor­mally re­served for dark suits hust­ling to and from hear­ings with a bind­er in one hand and a not-at-all-iron­ic Black­berry in the oth­er.

Fol­low­ing some tech­nic­al glitches, Pol­is be­came a di­git­al-wal­let-own­ing mem­ber of the crypto­cur­rency com­munity. After veri­fy­ing his iden­tity with his phone, a PIN, and his palm veins — “The NSA has all this, right?” — he suc­cess­fully de­pos­ited $10 in cash, a trans­ac­tion that net­ted him .02 bit­coin.

“.02!” he glee­fully shouted in dis­be­lief. “I have .02 bit­coins?”

Bit­coin is the most pop­u­lar brand of a grow­ing num­ber of di­git­al cur­ren­cies, which can be swapped for tra­di­tion­al dol­lars or spent at a grow­ing num­ber of par­ti­cip­at­ing on­line stores and real-world re­tail­ers. Its us­age has ex­ploded in the past year, in­creas­ing by more than 75 per­cent between Ju­ly and Decem­ber.

Its evan­gel­ists view it as a quick and in­nov­at­ive form of pay­ment that ducks some of the fees com­monly as­so­ci­ated with on­line trans­ac­tions. Its crit­ics view it as a province of an­onym­ous act­ors with ne­far­i­ous in­tent, such as money laun­der­ing or drug traf­fick­ing.

But Pol­is, joined Tues­day by Rob­ocoin CEO Jordan Kel­ley and cofounder John Rus­sell, wanted to dis­pel such wor­ries, which can prompt politi­cians like Sen. Joe Manchin to de­clare that we need a ban on bit­coin. At­tor­ney Gen­er­al Eric Hold­er joined the skep­tic­al train Tues­day when he told Con­gress vir­tu­al cur­ren­cies pose con­cerns for law-en­force­ment agen­cies be­cause they can “con­ceal il­leg­al activ­ity.”

“The cur­rency of choice for those seek­ing to en­gage in il­li­cit activ­ity is still cash,” Pol­is said, not­ing that he had to go through three steps of au­then­tic­a­tion to use the Rob­ocoin kiosk. When asked about bit­coin’s ra­ging volat­il­ity and the re­cent crash of Ja­pan-based ex­change Mt. Gox, Pol­is offered, “On a much great­er scale, we saw [the same thing] from AIG.”

Rob­ocoin’s Kel­ley, who could eas­ily be mis­taken for a surfer and looks a bit like the founder of the char­ity In­vis­ible Chil­dren, used words like “awe­some,” “cool,” and “sol­id” to de­scribe his product. He pro­ceeded to wax philo­soph­ic about the power of bit­coin to lib­er­ate.

“Our goal is to bring bit­coin to the 99.99 per­cent,” Kel­ley said. “The world has much more to be­ne­fit with bit­coin than without.” The sen­ti­ment was echoed by the Bit­coin Found­a­tion’s Jim Harp­er, who stopped by the ce­re­mony to say bit­coin has “the op­por­tun­ity to up­lift people around the world” by provid­ing a re­li­able money sup­ply to tattered and des­pot­ic coun­tries that fail to main­tain their own.

Then it came time for the smartest guy in the room to talk. There was a palp­able sense of anxious ex­cite­ment when Rus­sell, the bed-headed tech wiz­ard be­hind Rob­ocoin, ap­proached the po­di­um.

“What makes bit­coin so spe­cial?” Rus­sell began. He al­lowed his ques­tion to linger quix­ot­ic­ally, as if he was just that mo­ment form­ing an an­swer. After tick­ing off some of bit­coin’s more com­monly touted vir­tues, Rus­sell, chan­nel­ling a Steve Jobs eth­os, dove deep.

“We are now able to take tech­no­lo­gies that re­quired cent­ral­ized cur­ren­cies and make them de­cent­ral­ized,” Rus­sell said, eyes widen­ing. “We are see­ing it now in cur­rency, but ex­pect to see it a whole new way in the fu­ture.”

Dur­ing Rus­sell’s mus­ings, Rep. Bob Good­latte, chair­man of the House Ju­di­ciary Com­mit­tee, walked in. A tech afi­cion­ado in his own right, the Vir­gin­ia Re­pub­lic­an de­clined to say wheth­er his pan­el would hold a hear­ing on di­git­al cur­ren­cies, though he showed vis­ible en­thu­si­asm for Rob­ocoin and said he might fol­low Pol­is’s lead and pur­chase some bit­coin of his own.

Pol­is and Good­latte aren’t alone. Though Pol­is said his fel­low law­makers need to study up on bit­coin, the tech­no­logy is gain­ing in­terest in Con­gress. Last week, the House Small Busi­ness Com­mit­tee held the cham­ber’s first bit­coin hear­ing, a fol­low-up to two hear­ings con­vened in the Sen­ate late last year. And Rep. Steve Stock­man an­nounced this week he will in­tro­duce the Vir­tu­al Cur­rency Tax Re­form Act, which would al­low the IRS to treat bit­coin and its ilk as cur­rency on fed­er­al taxes.

But if reg­u­lat­ors re­main skep­tic­al of bit­coin, so too do its early ad­op­ters re­main of gov­ern­ment in­ter­fer­ence. Tech­no­logy needs space to grow and thrive, Rus­sell said Tues­day, liken­ing the cur­rent “to le­gis­late or not” de­bate to one that once swirled around an­oth­er strange in­nov­a­tion 25 years ago.

“When the In­ter­net was first be­ing in­ven­ted and first be­ing brought to Con­gress, it was asked at that peri­od of time if reg­u­lat­ors should just wait and see or if they’d want to ban it.” Rus­sell said.

“I would en­cour­age them to wait and see.”


Welcome to National Journal!

You are currently accessing National Journal from IP access. Please login to access this feature. If you have any questions, please contact your Dedicated Advisor.