The rising value of the digital currency Bitcoin has helped fuel the growth of a South Florida Bitcoin ATM company and a statewide association that is working to create a friendly business environment for financial technology firms.

In 2016, Lee Hansen and his business partner Lennart Lopin started ByteFederal, a Venice-based company that manufactures and operates Bitcoin ATMs where people can trade the currency for cash.

CEO Mr. Hansen, 48, has worked as a financial advisor and software engineer. The company’s chief technology officer, Mr. Lopin, 42, is also a software engineer with a special interest in computational linguistics and artificial intelligence.

ByteFederal now operates 125 ATMs in 15 states, with 38 locations across Florida. The company’s website allows you to search for local businesses that host its ATMs, such as Fire Vape Smoke Shop in West Palm Beach, Friendly Market in Naples, Down T Liquor in Fort Myers and PGI Liquors in Punta Gorda.

A ByteFederal Bitcoin ATM. The company manufactures and operates Bitcoin ATMs across Florida and in 14 other states at local businesses such as Down T Liquor in Fort Myers, Fire Vape Smoke Shop in West Palm Beach, Friendly Market in Naples and PGI Liquors in Punta Gorda. EVAN WILLIAMS / FLORIDA WEEKLY

A ByteFederal Bitcoin ATM. The company manufactures and operates Bitcoin ATMs across Florida and in 14 other states at local businesses such as Down T Liquor in Fort Myers, Fire Vape Smoke Shop in West Palm Beach, Friendly Market in Naples and PGI Liquors in Punta Gorda. EVAN WILLIAMS / FLORIDA WEEKLY

In 2018, Samuel Armes and Mr. Lopin co-founded the Florida Blockchain Business Association. Blockchain is a digital architecture that allows Bitcoin to work by keeping a public ledger of all transactions, but it has potential applications across many other industries.

Mr. Armes serves as president of the association. He and other members have supported two bills signed in to law by Gov. Ron DeSantis. The first created a 13-person Florida Blockchain Task Force, which held its first meeting last September in Tallahassee. The second, signed by Gov. DeSantis in July, created a “fintech sandbox” for blockchain and cryptocurrency companies.

According to the Blockchain Business Association, this fintech sandbox “creates an environment where companies that disrupt the status quo are provided regulatory flexibility to operate and provide new types of products and services.”

It allows the Office of Financial Regulation to “waive certain licensure requirements for FinTech companies to offer innovative services in Florida … while ensuring OFR has sufficient authority to protect consumers.”

VERLEY

VERLEY

Overall, the fast-rising value of Bitcoin has helped lift business efforts. But at the same time, Bitcoin is still widely considered a volatile, high-risk form of currency in which investors should be prepared to lose their money.

The price of Bitcoin quickly recovered since losing half its value as investors initially fled in a “flash crash” during the beginning of the pandemic. But in recent weeks the price continued to rise from a low this year of below $5,000 to upwards of $12,000, suggesting that more investors see this form of digital currency as a safe haven not unlike gold, say Bitcoin industry professionals and enthusiasts.

Bitcoin is often called “digital gold” because only a finite number of Bitcoins, about 21 million, will ever be created. It is by far most popular form of cryptocurrency, though there are others. The idea and design of the Bitcoin system was created by an anonymous person in 2009 using the pseudonym “Satoshi Nakamoto.”

Over the last five years, its value went on a rollercoaster ride from about $400 per coin five years ago to an all-time high of $19,665 in 2017 before coasting down below $4,000 in 2018, and then rising again above $11,000 in 2019, according to CoinDesk.

ByteFederal makes money on transaction fees at its ATMs, and businesses where the ATMs are placed get a cut of the fees.

Starting a business based on cryptocurrency in a system it’s designed to disrupt was an uphill battle, Mr. Hansen and Mr. Lopin said. They interviewed with more than 400 banks before finding one that would take them on.

“It took us years,” Mr. Lopin said. “It was a very, very difficult journey just to get a bank account.”

As a financial services company they are also monitored by the Financial Crime Enforcement Network, a division of the Treasury.

Once they began, though, their business grew along with the price of Bitcoin. Now, the pandemic appears to have had a positive effect on business.

“We’ve seen a significant uptick in transaction volume throughout the entire process,” Mr. Hansen said.

He attributes that to a renewed interest for many people in Bitcoin as a potential safe haven for money and a possible future alternative to central banking.

For those interested in exactly how Bitcoin works, its many implications or its mysterious history, Mr. Lopin recommends what he calls an “instant classic” in the world of Bitcoin called “The Bitcoin Standard.” There are also numerous YouTube videos explaining it. Bitcoin is touted as an alternative to our current system in which we trust a central banking system to handle our transactions and make sure we don’t cheat.

The major innovation behind Bitcoin was to create a monetary system that can be trusted without any central authority. This “decentralized” system relies on computers throughout its network to provide checks and balances and keep a public ledger on every transaction. The ledger is managed within a digital architecture called a blockchain.

It is all still relatively new technology, Mr. Lopin points out. And Bitcoin’s volatile price, like the stock market, can reflect many factors including inflation, hype, media influencers, political events, pandemics, and how many people use it.

Other members of the Blockchain Business Association that Mr. Armes started are pursuing their own projects in South Florida.

A liaison for the Association in Palm Beach County and an SEO and digital marketing consultant, Lenny Mauricio started an initiative to convince businesses along Clematis Street, a shopping and entertainment destination in West Palm Beach, to take Bitcoin and other cryptocurrencies from customers as a payment option.

He hopes to have 20 or more businesses signed up over the next sixth months with an app that allows them to use the digital currency system. After the system shows success along Clematis, he plans to take it to other cities such as Miami.

“We’re not trying to eliminate the current financial system, all we’re trying to do is give them an alternative,” he said.

Mr. Armes worked for a lobbying firm before deciding to start his own crypto lobbying firm, which grew in to the Blockchain Business Association.

Now age 23, Mr. Armes recalls being introduced to the world of Bitcoin when a friend bought him some in high school about seven or eight years ago.

How is that investment doing now?

“It’s doing pretty damn good,” he said, though he didn’t name an exact figure.

A Southwest Florida cryptocurrency enthusiast, as well as a filmmaker and photographer, among other activities, Justin Verley, 24, delved in to Bitcoin as an investor starting in 2016. He has worked as a Bitcoin “miner” — people in the cryptocurrency system who record transactions on a public digital ledger and are thereby rewarded with a fee for doing so. He plans to go back to school to further study blockchain and its applications.

He pointed out that using Bitcoin is relatively germ-free compared to money, and that Bitcoin’s price has gone up in correlation with the federal government printing massive amounts of money to help with the pandemic economic downturn.

“If anything, I’d say COVID-19 is a driving force for Bitcoin in terms of price and usability,” he said. ¦

(Excerpt) Read more Here | 2020-08-26 21:39:51
Image credit: source

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