- Growing Popularity
- Added Functionality
- Optional KYC - Anonymous Transactions
- Direct Access to ICOs
- Fractional Ownership Programs
- Bitcoin ATM Problems
- Bitcoin ATMs - You Decide
The Bitcoin ATM sector is heating up thanks to a combination of factors, including better technology, more functionality, and increased demand. Increased demand is the main reason why more investors are looking towards this automated business model as the smart entry point into the Bitcoin business sector.
Bitcoin ATMs are springing up in new locations at an increasing rate. These standalone crypto hubs allow users to enter the crypto market without the need for technical knowledge. In essence, a Bitcoin ATM user doesn’t need to know anything about the crypto market. Bitcoin ATMs are considered by many as the missing link between the crypto market and everyday consumers. These machines are easy to use, and they provide crypto investors with a reliable alternative to fiat-to-crypto exchanges, such as Coinbase. Let’s take a moment to examine the advantages and disadvantages of this budding crypto business sector.
The crypto market is expanding. Every day, new investors are learning about the advantages of blockchain technology. This demand is creating a unique opportunity for savvy entrepreneurs looking to position themselves in the market before mainstream adoption. Bitcoin ATMs bring a new level of convenience to the crypto market, by allowing any individual to purchase crypto directly.
Bitcoin ATMs are one of the most cost-effective BTC businesses you can start. These units cost around $10,000 each. Bitcoin ATMs don’t require a lot of electricity to function, and there is no additional hardware required to monitor your investment. These reduced operating costs are luring would-be miners to the ATM sector.
Restocking costs must be accounted for when considering the operating costs of your ATM. Most units will require you to connect your device to a hot wallet dedicated to your ATM. You will need to monitor this wallet to ensure bitcoin are available for purchase by your customers. If you allow your wallet to empty, your customers will be unable to purchase bitcoin.
Some units come preprogrammed to an exchange. These units don’t require you to stock a hot wallet. Instead, Bitcoin is purchased directly from the exchange and transferred to the Bitcoin ATM user. This option can save you on startup costs, but you will have to pass the exchange fees on to your customers to avoid cutting into your profit.
You will need to stock your ATM with cash if you live in an area where customers can sell their Bitcoin at the device. Pro-crypto countries such as Japan and South Korea provide their citizens with this option. The US has been restrictive in allowing this option due to the regulations revolving around fiat currency exchanges.
Bitcoin ATM manufacturers are adding new functionality to their units at a dizzying rate. You may find that some of these new features are equally valuable to the ability to purchase Bitcoin. Most Bitcoin ATMs allow the user to purchase various altcoins. Litecoin, Ethereum, and Bitcoin Cash are the most popular altcoins added to these ATMs. Although, some units offer a much wider selection.
Optional KYC – Anonymous Transactions
One of the biggest advantages of a Bitcoin ATM is the anonymity that can be enjoyed by the user. As, Know Your Customer (KYC) laws creep into the crypto space, those who desire to protect their privacy can do so by utilizing one of these helpful devices.
The best Bitcoin ATMs will allow you to opt into KYC laws if they are required when operating in your region. This feature also will allow you to adjust your Bitcoin ATM’s functionality to meet your local laws. The crypto space is seeing growing regulations, and by choosing an ATM with this ability, you ensure your machine can meet local legal requirements.
Direct Access to ICOs
Some Bitcoin ATMs provide their clients with direct access to approved Initial Coin Offerings (ICO). Trilliant’s latest line allows you to purchase altcoins from ICOs using BTC, ETH, LTC, or fiat currency. The developers behind the project recognized the need for more open access to the crypto market, and this latest feature makes entering the crypto space easier than ever.
Fractional Ownership Programs
Fractional ownership Bitcoin ATMs allow you to buy into a unit for as little as $100. These programs utilize legally binding blockchain-based revenue sharing smart contracts to guarantee your profit percentage. Blockchain technology provides users with 100 percent transparency.
Bitcoin ATM Problems
Some inherent problems exist within the Bitcoin ATM market. Specifically, there are no federal laws regarding the placement of these units in most regions of the world. This lack of transparency makes it difficult to guarantee that your Bitcoin ATM will not get messed with by local officials. The state of Vermont famously shut down an early Bitcoin ATM in 2015 due to different interpretations of the legal status of these machines.
In addition to the uncertainty of the market, you also have to deal with Bitcoin price fluctuations. Last December, Bitcoin was just under $20,000 a piece. Today, Bitcoin is just above $6,000. You would have taken a significant loss if you stocked your hot wallet with $19,000 BTCs and sold them for less than half their original purchase price. The volatility of the market will have a direct effect on your profits.
Exchange linked Bitcoin ATMs have different issues. These units must rely on the exchanges to complete a customer’s order. There have been numerous complaints made by individuals who say that these units continuously malfunction.
One of the most publicized incidents to date occurred when Business Insider analysts Matt Weinberger attempted to use a Bitcoin ATM in Las Vegas. The ATM ended up rejecting his $11 purchase due to not meeting the minimum amount required. However, there was no mention of a minimum purchase amount on the unit.
Consequently, the unit ended up keeping his $11 and not giving him any BTC. After he contacted Coin Cloud, the company explained that the unit was unable to dispense his BTC because of the mining fees at that time. The firm offered to send his BTC directly. This incident highlights the flaws that still exist in this new technology.
In the end, the ATM functioned correctly, but the market was experiencing congestion, which resulted in the ridicules fees. You can imagine how your future customers would get upset in this situation.
Bitcoin ATMs – You Decide
Only you can decide if a Bitcoin ATM business is the right investment. You may find this to be a lucrative investment if you live in an area that has a strong crypto following. BTC businesses are expected to see further adoption in the coming months. It’s no surprise. People are always looking for a simpler way of entering the crypto market. Bitcoin ATMs can be that route.
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