The Lynnwood 76 service station has all the essentials. Gas. Food. Bitcoin.
What’s up with that?
A Bitcoin ATM sits next to the lottery self-service kiosk in the convenience mart at the bustling 11-pump station at 19611 Alderwood Parkway.
The ATM has been inside the 76 station for more than a year, but didn’t get much attention until the recent hoopla that made Bitcoin the Kardashian of currency.
At first glimpse, the boxy white machine owned by national company Coinme looks like one of those Coinstars you dump your stash of pennies and quarters in and, cha-ching!, turn it into paper money backed by the U.S. Treasury.
Looks are deceiving. This ATM deals in digital money, also called cryptocurrency, that has no tangible form and is used worldwide with no central regulating body or bank. Investors from America and Africa to North Korea and New Zealand have pumped billions of dollars, euros, yen, rubles and other real money into it. It’s not legal tender nor is it illegal.
Bitcoin exists virtually, like a figment of your imagination. In reality, it is valueless bits of computer data. It’s stored in a digital wallet. There’s nothing to jingle in your pocket. Despite the name, it’s not even a “coin” in the old-fashioned sense.
This newfangled currency is created through a process called “mining” on computers around the globe to form blockchains. That’s right, this currency worth billions is just a bunch of numbers generated by equations that only computers are smart enough to do.
“It’s code,” said 76 gas station shopper Michael Gorta, visiting from California.
Gorta had studied up on Bitcoin but not invested — yet. He noticed the Bitcoin ATM when he came in for scratch lottery tickets, which are funded by the state.
“There is no physical backing,” he said of Bitcoin. “It’s only worth what someone will give you for it, at the moment.”
For him, that was a green bill with George Washington. He fed the $1 bill in the ATM for Bitcoin, which was going for about $16,600.
“For one dollar I own 0.0000546 Bitcoins,” Gorta said, laughing. That was really 90 cents worth: Coinme charges a 10 percent transaction fee.
You can buy up to eight decimal points of Bitcoin. It’s like buying pizza at Brooklyn Bros. It’s sold by the whole or by the slice, though in this case, fractional pieces.
Most Bitcoin buyers go to the 76 gas station for petrol, not crypto. They use their phone or computer to wheel and deal in digital currencies. Unlike store hours or the stock market, trading is 24/7.
The main way to buy Bitcoin is to use an app, such as online trading broker Coinbase (no relation to Coinme), which allows people to carry around their big wad of blockchains on their phone.
Coinbase was the most downloaded app at Apple’s Apps Store a month ago, when a single Bitcoin, which started 2017 at less than $1,000, spiked to nearly $20,000 in mid-December.
A Bitcoin has since hovered in the $13,000 to $16,000 range, which is still a good tease and a gamble. That’s what this is: gambling. Think of it as putting money in a slot machine.
The Coinbase app also offers a few virtual cousins of Bitcoin, such as Ethereum and Litecoin, which cost less and also fluctuate wildly in price — a month ago, Ethereum was $450 and at this writing is about $1,100. There are many other virtual coins out there, gobbling up billions of dollars. The site CoinMarketCap.com lists 1,386 different coins.
It costs real money to buy. And when you sell it, you get real money. Or you can shop with it. Bitcoin is accepted as payment by Expedia and Overstock as well as some stores, coffee shops, bars, car dealers, hairdressers, dentists and, it turns out, kidnappers. Last week, a Kiev crypto company executive was kidnapped by an armed gang then freed after paying the ransom demand of more than $1 million in Bitcoins.
Bitcoin has been around since 2009. Until recently, the only people who talked about it were techies, thugs and random sorts you’d never suspect (like me).
Crypto mania has many critics, especially traditional investment advisers who warn of the risks.
One called it a “financial one-night stand.”
Another put it this way: “It’s basically a class of really stupid speculators who have convinced themselves that trees grow to the sky. It will burn out in a spectacular crash. All of these latter-day speculators will have their hands burned to a crisp, and they will learn the proper lesson.”
I sure learned my lesson.
In early 2014, on a curious whim after reading something on the internet about Bitcoin, I bought in when it was $800 a coin. A month later, it fell to about $466 a coin. When it plunged to $213, I bought more, two coins in all, in hopes I’d recoup my investment someday from these trees in the sky.
Last spring, the uptick started. I sold off a fraction here, a fraction there, as it went up … never imagining it would reach $20,000 at its peak.
If I’d held onto both coins, I could have cashed in at 40 grand last month and would have quit my day job for a year.
I still came out with a tidy profit. Our family had a very merry Christmas thanks to “Bitcoin Santa” and “Mrs. Crypto Claus.”
Andrea Brown: 425-339-3443; abrown@heraldnet.com. Twitter: @reporterbrown.
Have a digital currency tale to tell? Let me know at abrown@heraldnet.com.
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