Coinucopia Offers Bitcoin ATMs as Cryptocurrency Boom Broadens

Bitcoin (Rick Bowmer / AP)
Rick Bowmer / Associated Press
Newport Beach, CA

Coinucopia is now offering ready-access bitcoin ATMs at 17 Northern California locations as the cryptocurrency boom draws broader public interest.

With many analysts promoting bitcoin cryptocurrency as a way of reducing transaction costs in the banking system, and providing a store of wealth that is outside control of central banks, Bitcoin’s visibility is viral.

Although the price of bitcoin was down $392.08 on Dec. 18 to $18,692.07, it is up over by about 2,400 percent from $790.18 in the last twelve months. Three-quarters of that price move came in the last five weeks as the worldwide number of bitcoin ATMs hit 1,957, and the CME Group Inc. launched the first U.S. Bitcoin futures market.

The intrepid Charles Hugh Smith commented in his oftwominds.com blog: “Nations that attempt to limit cryptocurrencies’ ability to solve these problems will find that protecting high costs and systemic friction will grind their economies into dust.”

But he added, “A Wild West free-for-all is conducive to scammers, and so some thoughtful regulation that protects users is to be welcomed.”

Smith noted, for example, that cryptocurrencies are not outlawed in China, but pioneering bitcoin exchanges were shut down until regulators could get a handle on how to deal with the potential for excesses such as fraud and misrepresentation.

Governments have a selfish desire to tax income and capital gains to fund their activities. Right now, cryptocurrency speculative trading gains are generally not being reported to taxing authorities. But bitcoin trading losses probably are being reported.

Smith acknowledges that those who must pay taxes tends to hate them, but “fully legalizing and regulating cryptocurrencies as financial instruments would tend to legitimize them in a much wider circle of potential users.”

Smith worries that legalizing cryptocurrencies would involve the participation of government central banks and financial intermediary banks that over the last twelve years have inflated enormous bubbles in the worldwide real estate, stock, bond, mortgage, and auto loans markets to a stated value of about $500 trillion.

But Smith believes that if — and, more likely, when —  the bubbles pop, about half of this “phantom wealth” could disappear. At that point, owners of that phantom wealth will be “desperate to sell what is dropping in value and convert into assets holding their value or appreciating.” In that environment, a regulated bitcoin market could offer a store of value that is outside the bubble-blowing machinery of government central banks.

In the current, unregulated bitcoin environment, there about 5,000 Bitcoin miners that currently have agreed to limit the number of bitcoins. But they could conspire to sell their holdings, and then propose issuing a trillion new coins to crash the bitcoin market.

The millions of members of the public will, unfortunately, be the last people to know if the bitcoin miners are trustworthy or not.

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