News | Convention center gains an amenity: a bitcoin ATM
December 10, 2014
By Andrea Rumbaugh | Houston Chronicle
Houston unveiled its first bitcoin ATM on Wednesday, hoping to attract international travelers and more conventions to the George R. Brown Convention Center.
Bitcoin is like digital cash. And this ATM, on the downtown center's second floor next to a Starbucks, allows users to convert cash to bitcoin and vice versa.
"Houston First always wants to be the first in offering amenities to its attendees and guests," said Mark Goldberg, assistant general counsel for Houston First Corp., the quasi-public organization that manages the convention center. "With us now having this ATM machine … we've proven that we're on the cutting edge of technology."
Bitcoin is gaining momentum in Houston, although the adoption rate here lags behind Austin and Dallas, said Adam Richard, president of the Houston-based nonprofit Texas Coinitiative.
He predicts local awareness will continue rising as Apple Pay makes consumers more familiar with digital payments and as merchants begin offering incentives for people to pay with bitcoin.
"The interest keeps rising every week," he said. "I'm excited to see where we're going to be in a year from today."
Richard started the Houston Bitcoin Meetup a year ago and has seen membership grow to 271, from about 20 in the early days. He said these members have created about 12 Bitcoin startups or projects.
The CoinVault ATM in Houston is one of about 260 bitcoin ATMs around the world, though not all of these machines allow users to buy and sell bitcoin, said Sheldon Weisfeld, the CEO of CoinVault ATM based in Houston. The CoinVault ATMs can buy and sell bitcoin, which allows users to convert cash to bitcoin and vice versa. CoinVault ATM also has an ATM operating in Austin and another in Dallas.
The downtown convention center's ATM charges a 5 percent fee based on the real-time market rate for bitcoin. A user can create an account at the ATM. Then, each time the ATM is used, a text is sent to the user's phone with a six-digit authentication code. This number needs to be typed in to the ATM, for security purposes, before any transactions can be made.
Weisfeld said he believed this ATM would help attract business to the convention center.
"The bitcoin community is the world's largest loyalty population," he said. "People that have bitcoin around the world have a tendency to want to do business in places that will do business in bitcoin. So we see the George R. Brown Convention Center establishing a first that is going to bring conventions to Houston."
These types of ATMs can also be a draw for international travelers. Michael Cargill, who installed a CoinVault ATM at his Central Texas Gun Works in Austin in March, said visitors from other countries come in to exchange their virtual currency for U.S. dollars.
"We're keeping up with technology," he said. "A lot of gun stores are still on fax machines."
Richard, with Texas Coinitiative, said Texas is a favorable state for bitcoin because the Texas Department of Banking released a memo earlier this year that clarified its policy in regard to virtual currencies.
"While the popularity of bitcoin has sparked new discourse on the nature of money and transferability of value, this memorandum seeks only to establish the regulatory treatment of virtual currencies under existing statutory definitions," the memo stated.
Clarification from state
Daniel Wood, assistant general counsel for the Texas Department of Banking, said the memo clarified what type of bitcoin-related businesses do and do not need money transmission or currency exchange licenses.
Since that memo, he said employees in the department were shocked to receive fan mail.
Richard said defining the department's view on digital currencies helped lower barriers for entrepreneurs.
He sees bitcoin as the next evolution of money. There's no central authority or middleman, and bitcoin will go directly from the buyer to the seller. He said the payments can be sent around the world almost instantaneously and for generally less than a penny.
He also said the process can reduce payment errors and fraud.
Goldberg, with Houston First, described the ATM as a "new era of technology" for the convention center.
"We see that the convention center visitors are going to be demanding more and more of this type of digital currency," he said. "And we have already received serious consideration from cryptocurrency conferences to locate some of their conventions in our facility."