(Disclosure: I own a very small amount of Litecoin, which I purchased this week to test out the new ATM. I also own a very small amount of Bitcoin, which I’m hodling for the long term (think you see a typo in this sentence? Think again). Investing in cryptocurrencies is speculative and this article is not meant as an endorsement.)

Daren Hebold, founder of Luxolo Financial. (Photo/Whit Richardson)

Luxolo Financial, a local startup that wants to offer cryptocurrency-related services to the region, has opened an ATM in downtown Portland that provides Bitcoin and Litecoin, two of the largest cryptocurrencies by market cap, in return for cash.

The new ATM is located within TechPort at 23 Temple St. in Portland.

Daren Hebold, Luxolo’s founder, said he launched the company and invested in the ATM because he believes in the power of cryptocurrencies like Bitcoin and Litecoin to help people achieve “financial sovereignty.”

Luxolo‘s new ATM comes at a time when cryptocurrencies—Bitcoin being the most recognizable—are gaining more mainstream attention. I’ve included a short primer on Bitcoin below.

Hebold, who comes from a real estate background (he’s president of Lux Realty Group in Portland), became interested in cryptocurrencies a few years ago. He says the more he looked into Bitcoin and cryptocurrencies, the more intrigued he became.

“It was a red-pill experience,” he says. “It was a wake up call to the problems I didn’t even realize we had with our current financial system.”

Those problems, according to Hebold, include a system where people are constantly required to trust third parties like banks and other financial services companies with their confidential info and wealth. But, in an age of hacks and massive data breaches at companies like Equifax and JP Morgan Chase, that trust is eroding. The beauty of cryptocurrencies, he says, is that “people can be their own bank.”

How does Bitcoin allow people to become their own bank? This isn’t the place for a full-fledged tutorial on cryptocurrency, but here’s a short primer for those unfamiliar with Bitcoin (skip if you’re already well versed in cryptocurrencies): Bitcoin is a cryptocurrency that enables people to make digital financial transactions without the need for a third-party middleman, such as a bank or credit card company or even a PayPal—think of it like how you can use cash without the need for a middleman, but digitally. This is possible because of an accounting method developed for Bitcoin known as the blockchain, which is a digital ledger that keeps track of all transactions. This ledger is not held and reconciled by any third-party like a bank. Instead it’s decentralized and distributed, meaning copies of the ledger are held by computers throughout the network. New transactions made on the platform are combined into “blocks” (this is done by miners, but that’s a bit beyond the scope of this article) and added to the chain, with the ledger being subsequently updated throughout the network. Using cryptography, each block is tied to the preceding one in such a way that a malicious actor wouldn’t be able to alter the transactions within one block without hacking and editing the previous one, which couldn’t be changed without editing the previous one, and so on and so forth until you reach “block zero.” There are currently 507,335 blocks in the Bitcoin blockchain. Bitcoin’s market cap was $145.8 billion as of the time of publishing. There are also thousands of other cryptocurrencies (or you might see them called digital currencies or digital assets or digital tokens) and other blockchains. If you’re interested in learning more about cryptocurrencies and the blockchain, there are a ton of resources out there. I’m a big fan of this video.

Daren Hebold using Luxolo’s new Bitcoin ATM in downtown Portland. (Photo/Whit Richardson)

Luxolo’s ATM only accepts cash in return for Bitcoin and Litecoin, another cryptocurrency built on the same blockchain. Luxolo charges an 8% fee on the transactions, which is typical fee for Bitcoin ATMs. He’d like to deploy more ATMs in the region, but has no specific locations in mind yet.

Bitcoin was trading at $8,835.63 on Friday afternoon and Litecoin was trading at $130.52, according to Coinmarketcap.com.

Asked why Portland needs a Bitcoin ATM, Hebold responded with a question of his own.

“Why do people need financial sovereignty?” he asked.

He compared cryptocurrency today to where email was in 1991. That is: still obscure, utilized by very few, and the implications of which aren’t yet understood. The email analogy is an oft-used one for explaining the impact cryptocurrency could have on the global financial system. Crypto enthusiasts like to point out that just like email erased the need for international borders when it comes to communication, cryptocurrency will do the same for financial transactions. International wire transfers that currently take a week to clear and pass through several banks along the way will be replaced by near instantaneous transactions of Bitcoin or the like.

But the ATM is just the first phase in Hebold’s plans for Luxolo. He has plans to open a crypto-exchange desk that would provide in-person buying and selling services, he will offer consulting services to companies interested in exploring cryptocurrencies, and he plans to provide local merchants with the tools they need to begin accepting cryptocurrencies like Bitcoin and Litecoin as payment methods.

Even though it’s still early, Hebold believes that 2018 will be the year when more merchants begin to see the benefits of accepting cryptocurrencies for payments. What cryptocurrencies will gain traction first among merchants is up for debate, but Hebold believes that Bitcoin and Litecoin will be among the first and most successful.

Luxolo is not the first company to offer a Bitcoin ATM in Maine. Maine Bitcoin LLC operates Bitcoin ATMs in Biddeford, Lewiston, and Bangor, according to Coin ATM Radar.

Contrary to what some would expect, Hebold faced significant regulatory hurdles to launch Luxolo Financial and open its first ATM. On the federal level, Luxolo had to register with the Treasury department’s Financial Crimes Enforcement Network, which began regulating virtual currencies like any other money services business in 2011. In Maine, Luxolo doesn’t need any special licensing to operate an ATM, but it does need to register as a “money transmitter” before it opens its trading desk and acts as a middleman between buyers and sellers of cryptocurrencies. Luxolo’s money transmitter license application is currently “pending,” according to the Maine Bureau of Consumer Credit Protection’s online database.