The Picasso application from BTC China, one of the largest Bitcoin exchanges, can’t be called an ATM because you have to jump through too many hoops before you are able to get cold hard cash. Unlike an ATM where you can get cash out of the machine in a couple of steps, Picasso is labor intensive, making you wonder if it is worth the effort.
This highly inconvenient arrangement was designed to circumvent the regulations the Chinese government is placing on Bitcoin transactions. By creating the Picasso Wallet and making the Bitcoin exchange between two parties a physical payment of cash; BTC has created a loophole that allows its customers to use the digital currency without government interference.
The process involves loading the Bitcoins into the Picasso Wallet and selling it through the Web application. According to the BTC site, users can send Bitcoins using the wallet to any recipient address to trade or for safekeeping. All you have to do is find another person who uses Picasso and convince them to trade your Bitcoins for cash, whether it is in Chinese Yuan or US dollars.
As China and other governments around the world try to find a workable solution to integrate Bitcoin into traditional financial systems, users of the digital currency are finding ways to exchange it for cash or products and services.
If anonymity is what you are after, in a way the process BTC has introduced is better than an ATM because it doesn't require an actual machine in order to purchase or sell Bitcoins. With this solution users will become more anonymous regarding government regulators, which was one of the founding principles of creating this digital currency. On the other hand meeting a person you don’t know to get cash can be troubling for many people, making it one more hurdle Bitcoin has to overcome in order to get wider acceptance.
In addition to providing the wallet, Picasso also offers cold storage for keeping the coins safe. When Mt.Gox filed for bankruptcy after losing hundreds of millions of Bitcoins, the platform of the currency was very much in question. Theoretically the cold storage system is supposed to keep the coins safe, but there is no guarantee. According to reports BTC China has yet to pass any public audits to prove it solvency as well as the viability of the cold storage system it has in place.
If you have any Bitcoins with BTC China or anyone else, you have to make sure the system they have in place has been verified. If not it is best to use your own cold storage to protect your coins.
Edited by Maurice Nagle
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