By then, Bitcoin had begun attracting mainstream attention, and the Harveys began to see a business opportunity in the currency itself. (In October, 2011, Joshua Davis wrote about Bitcoinand its mysterious creator in the magazine.) In February, 2013, Zach unfurled a plastic tarp on the floor of his new guitar store in Manchester, New Hampshire. Using materials from Home Depot, he started to assemble and paint a wooden prototype for a machine that would sell bitcoins. Such machines are often called Bitcoin A.T.M.s, which is a misnomer: they don’t allow people to deposit bitcoins or withdraw them from their own accounts. Instead, you put a few dollars into the Harveys’ construction, watch as they are converted into bitcoin, and tell the machine where to deposit the resulting encrypted-currency funds. (Typically, the bitcoins are deposited into an online account called a “wallet,” where they can be used to make purchases.)

The Harveys unveiled their prototype, programmed by Josh, at the Liberty Forum, a conference for anarchists and libertarians just a short drive from their guitar store. By that time, bitcoins cost thirty dollars each—up significantly from the twenty-five cents they cost when the Harveys first began accepting them in their Tel Aviv store, several years earlier. After the conference, the brothers closed the guitar shop and set up a new company called Lamassu, named after the Mesopotamian sculptures of winged lions meant to protect the ancient civilization’s wealth and commerce.

Lamassu began manufacturing the machines, which were about a foot and a half tall and included a custom steel case and a Nexus tablet computer screen, at a plant in Portugal. Since the machines were intended to sell only bitcoins—which exist digitally—they did not require a supply of cash; their lockboxes are big enough to hold only three hundred bills at a time. Lamassu has since sold two hundred and twenty bitcoin dispensers, costing up to five thousand dollars each, mostly to entrepreneurs who buy a single one. A Bitcoin evangelist named Doug Scribner was one of the first people to purchase bitcoins from the Lamassu prototype, in February, 2013. He’s since used the machines several more times, including at last year’s PorcFest, a festival for small-government advocates, where he spent the encrypted currency on a blanket made from bacon strips. He gave away the remaining funds to Bitcoin newcomers.

Lamassu is now turning a profit, according to Zach. Its machines operate in locations as far-flung as Helsinki, Bratislava, and, as of February, Albuquerque, the company’s first U.S. location. Zach says that he expects to ship a hundred and ten additional machines over the next three months, units that have already been sold to locations in Saudi Arabia, Korea, China, Singapore, and Atlanta.

The Harveys aren’t the only ones who had the idea to build a bitcoin-dispensing machine. Two days after Lamassu’s Albuquerque launch, a competitor called Robocoin unveiled its first U.S. machine in Austin, Texas. Robocoin’s machines, unlike Lamassu’s, let customers convert their bitcoins into cash (along with turning cash to bitcoin). Other, lesser-known companies are also selling similar machines. But Lamassu got a burst of attention earlier this year, when it sold what the New York Post called the first-ever Bitcoin A.T.M. intended for New York City, to a Brooklyn resident named Willard Ling. If all goes according to plan, Ling says, he will charge a fee of three to five per cent of the price of the bitcoins he sells, to generate revenue, a practice typical of foreign-exchange brokers. But before Ling’s machine could be installed in its planned East Village location—a candy shop called Just Sweets—he told me that he had decided to wait and see how ongoing plans to regulate encrypted currency businesses in New York shake out.

Bitcoin trading once took place largely between individuals. Today, it is increasingly conducted under the auspices of a few international exchanges. Until a few weeks ago, one of the largest of these exchanges was Mt. Gox, based in Tokyo, which, in addition to facilitating trades, stored bitcoin for its customers. Owners of Lamassu machines were allowed to stock their machines however they saw fit, including through Mt. Gox. Then, last month, the exchange froze transactions and began offering bitcoins for well below their market value. Within six days, Mt. Gox had shut down and filed for bankruptcy, and its C.E.O., Mark Karpeles, admitted that seven hundred and fifty thousand of his customers’ bitcoins, valued at nearly half a billion dollars at the time, had gone missing. Karpeles blamed a bug in Bitcoin itself for the disappearance of his customers’ currency. (Earlier this month, Karpeles said he had found some of the lost bitcoins in a forgotten digital wallet.)

The collapse of Mt. Gox doesn’t seem to have had any impact on Lamassu’s sales, Zach said. In fact, he feels the collapse gives people even more reason to use his machines—if they haven’t abandoned bitcoins after the Mt. Gox scare. Two of the biggest faults Zach found with Mt. Gox were its too-concentrated authority over the funds and the fact that users were storing their money on a site that was best suited for exchange. Lamassu machines are owned by independent operators, who, according to the Harveys, are free to either supply the bitcoins from their own reserves or allow them to be withdrawn from an exchange site. Unlike Mt. Gox, owners of Lamassu machines do not store money for their users.

Earlier this month, Benjamin Lawsky, the superintendent of financial services for New York, requested applications from virtual-currency exchanges interested in doing business in the state. Applications from companies whose Bitcoin businesses are not virtual-currency exchanges, like Lamassu, will be accepted in the near future. “I think the most important thing regulation can do is strike the appropriate balance between encouraging innovation and not strait-jacketing the technological development that we want to see continue,” Lawsky told me.

Carol Van Cleef, an attorney and electronic-payments specialist at the law firm Manatt, Phelps & Phillips, said that owners of machines like those manufactured by Lamassu could have a hard time meeting financial regulations that might apply to them, such as a rule requiring that financial institutions report transactions in excess of ten thousand dollars or other activities that might be signs of money laundering. “That’s where I see the biggest challenge for these A.T.M. operators, especially the one-off operations,” she said. “Will they be able to support the compliance regime required to be put in place, not only to comply with the law but to protect themselves from being abused by criminal elements?”

Zach doesn’t think the industry needs any regulation at all. He sees a future in which centralized bitcoin exchanges like Mt. Gox are replaced by disparate machines made by him and his competitors, individually owned by local businesspeople. Bitcoin-machine maps would let people shop on their mobile devices for the most competitive exchange rates in their neighborhoods, in much the same way drivers shop for the cheapest gas prices. “It takes the pressure away from all these single failure points,” he said. “And so, if something goes down, you will always have a place to buy bitcoin.”/newyorker.com/

Photograph: Jan Koller/AP