Can Bitcoin Actually Be Safer for Travelers?

by Ryan Rudnansky
Last updated: 2:34 PM ET, Mon August 11, 2014

PHOTO: Robocoin opened up a Bitcoin ATM in Rome in June (courtesy Robocoin)

Bitcoin?

Safe?

Surely, that's not what you've heard from critics of the peer-to-peer cryptocurrency payment system.

But companies like Robocoin are striving to make the security concerns associated with Bitcoin a thing of the past.

In the early stages of Bitcoin's rise into the mainstream, there were several breaches of security into the accounts of Bitcoin users. Most notably, the shutdown of Mt. Gox-one of the world's largest bitcoin exchanges-sent a shockwave through the Bitcoin community (a potential loss of $400 million worth of bitcoin). Black-market website Silk Road (which has since been shut down by the FBI) also reported in February that hackers stole $2.7 million worth of bitcoin.

But Jordan Kelley, founder and CEO of Robocoin, claims that the Bitcoin system itself isn't the problem. The problem is doing business through third parties that don't place a high priority on security.

"Bitcoin isn't really the issue," Kelley said. "It's third parties…that's where the vast majority of companies have been hit (such as Mt. Gox)."

CNN Money cybersecurity reporter Jose Pagliery wrote in February in his article "How Mt. Gox went down" that the hackers or the Bitcoin system were not to blame for the colossal breach of security; in fact, it was "the result of abysmal mismanagement at the company."

Robocoin, the first company to introduce Bitcoin ATMs in October 2013, recently announced that it will be unveiling Robocoin 2.0 at the end of this summer. Included in the new version: better security.

Robocoin has already been a prominent figure in the movement to provide better security to Bitcoin users. For example, when you register for an account, you not only have to enter a code sent to your phone, you also have to scan your palm and provide proof of ID.

But there's more.

Robocoin can also save travelers who have lost their ID and means of payment during their travels.

"Let's say, for example, you go to Hong Kong and you get all of your (things) stolen…your passport, your ID, all of your credit cards, all of your cash…you're basically (screwed)," Kelley said. "This is where Robocoin comes in so beautifully. If you have money in a Robocoin wallet you can just walk up to one of our ATMs, enter your phone, your PIN and scan your palm, and you have access to your money."

And, given you sign in with the palm of your hand, you don't have to worry about someone hacking into your account.

On top of that, Robocoin is in the process of moving users' stored information into an advanced Tier 4 data center as part of its unveiling of Robocoin 2.0. Robocoin claims that the Tier 4 data center will be the first of its kind in North America.

"We've taken our security very seriously," Kelley said. "Storing your bitcoin with Robocoin is so incredibly secure, but also we took it one extra step (with the data center)."

Robocoin 2.0 will additionally serve as a digital wallet and a currency exchange system, among other things. There are roughly 30 Robocoin ATMs already spread out across 16 countries since October, accounting for 14 different languages and 14 different currencies. Robocoin ATMs are also open 24/7, so travelers don't have to wait to buy (deposit) or sell (withdraw) bitcoin like you would with a physical bank.

One of the main concerns for critics of Bitcoin has been the security of users.

Kelley and Robocoin aim to turn security and safety into advantages of using bitcoin, and consequently turn these same critics into supporters.

That extends to the travel industry, from Las Vegas to Singapore.