Bitcoin Grows in Popularity in Sacramento

SACRAMENTO -- It's a Tuesday evening at C&B Liquor on Broadway in Sacramento, and the ATM is busy -- the Bitcoin ATM.

People use it to trade real money for the cryptocurrency, a form of money that exists only in computer code. Bitcoin is the most prominent.

There are currently 10 Bitcoin ATMs in Sacramento. Mario Fantoni owns four of them.

"For Sacramento, Bitcoin is becoming our thing," Fantoni said.

Before you can get Bitcoin, you need a wallet to keep it in. A wallet, in this context, is a tool for storing the electronic ledger of your Bitcoin. It can be either hardware or an application.

But buying Bitcoin from an ATM can be an expensive way to go. After fees, I only got $70 worth of Bitcoin for the $100 I put in. Fantoni said the ATM fees are typically lower, but the same transaction on an internet exchange service only charged $1.50.

"Why do you pay 10 to 15 percent in a bitcoin ATM? Because we have to pay the miners," Fantoni said.

A miner is someone who creates new Bitcoin by solving complex equations generated by the Bitcoin apparatus.

Rick Plant is a Bitcoin miner. He set up his operations in his mother's kitchen.

"She's OK with it," he said. "She's a great mom."

Plant networks his computer with a group of other miners. Every 10 minutes, the Bitcoin apparatus generates a fantastically-hard equation. The prize for solving it is Bitcoin.

"No one's going to figure it out except the computer, and it takes a really long time to get the number right," Plant said.

China mines a vast majority -- 70 to 80 percent -- of Bitcoin, according to Fantoni.

"These are not people sitting at home on their computer," he said. "These are large warehouses. People live in there. They have thousands of computers."

The computers work so hard and generate an enormous amount of heat. They have to be cooled constantly.

But what Plant thinks is cool is the idea of money that's by the people and for the people.

"I guess it's just, anti-bank. And nothing to do with... it's decentralized so there's no central authority over it," Plant said.

Those in the business of Bitcoin agree -- cryptocurrency is the future of money.

"We have to be very smart about that. It's where the world is moving to. Some have talked about, 'You can't breach it,' but we have had instances where it's been breached," California State Treasurer John Chiang said.

Fantoni says he doesn't really know yet what that future will look like, but he says that's part of the fun.

"You just expect because you are big, and you are powerful, you will survive. Well, we don't have dinosaurs for a reason -- because the climate changed. So imagine a technological climate change. It's happening in the financial world and with taxes, with power," Fantoni said. "And the government and the banks and the people that don't adjust to that change will follow the fate of the dinosaurs."