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World’s first bitcoin ATM machine goes live in Vancouver

Bitcoin has entered the physical realm with the world's first bitcoin ATM machine which allows users to instantly exchange the virtual currency for cash.

Located in a coffee shop in Vancouver, Canada, users can draw out funds from their bitcoin account and receive the money in dollars.

Currently one bitcoin is worth $210 (£130). The currency, held in virtual wallets, can be transferred independently of banks so cutting fees, as well as large banks' control of the money.

The machine, built by Las Vegas-based Robocoin, looks similar to an ATM but with the addition of hand and barcode scanners.

"It's as easy as walking up to a machine, scanning your hand, entering some cash and buying bitcoin," Jordan Kelley, chief executive of Robocoin told Reuters. "With this, it's a two minute process. For any online exchange, it's at least two days."

The ATM works by users scanning their hand to confirm identity, then authorising funds to move from their virtual wallet held on their smartphone. Users are limited to transferring $1000 (£625) a day to help prevent money laundering through the machine.

Local firm Bitcoiniacs, which operates the ATM, is set to install four further machines across Canada in December.

Due to a critical mass of users in the country and less stringent oversight of the currency than in the US, Robocoin said Canada was the ideal place to first introduce the technology.

"We think the Vancouver market is enormous and we're excited to be here," said Kelley. "By the end 2013, we'll be all over Canada. By the end of 2014, we'll be all over the world, including the United States."

Bitcoin soared from $13 (£8) in January to a high of $266 (£166) in April, with some investors treating bitcoins like gold, using the virtual currency to hedge against national currency fluctuations.