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Ten years ago, the world welcomed the first Bitcoin ATM at Waves Coffee House in downtown Vancouver, British Columbia
Since that point Bitcoin ATMs have increased exponentially. According to Coin ATM Radar, there are currently 37,056 Bitcoin ATMs operating around the world, and 31,006 in the United States alone. Despite the popularity of online currency exchange offices, the number of ATMs in locations similar to gas stations, shopping malls and grocery stores is consistently growing.
Bitcoin ATMs are key to accelerating cryptocurrency adoption and generating revenue for the retailers that host them. They also represent a lucrative opportunity to make money – the Bitcoin ATM market is predicted to change into one grow to USD 16.85 billion in 2033.
Importance of Bitcoin ATMs
Bitcoin ATMs are essential to the crypto economy. They function a ramp for fiat (dollars) to enter the cryptocurrency ecosystem, accelerating cryptocurrency adoption and providing non-bank or anti-bank consumers with access to financial services. Some Bitcoin ATMs sell cryptocurrencies for money, serving as fiat currency and offering quick access to money.
Bitcoin ATMs are neighborhood access points to cryptocurrencies. People should buy cryptocurrencies while filling their gas tank or shopping for groceries. The “Bitcoin Sold Here” sign encourages interest in this latest asset class and sparks interest in learning more about cryptocurrencies.
Digital currencies similar to Bitcoin were developed to create a latest type of electronic money, and Bitcoin ATMs allow people to purchase this latest currency and use it for digital payments, remittances, or as a store of value. Imagine if someone made traditional assets like stocks available for purchase for fractional amounts in physical locations, for money. Bitcoin ATMs represent a financial opportunity because Bitcoin’s deflationary store of value is unprecedented.
Bitcoin ATM use cases
There are countless explanation why people use Bitcoin ATMs. People consider Bitcoin and other cryptocurrencies to be a speculative store of value or a more efficient medium of exchange. In these cases, two digital currencies are popular: Bitcoin and USDC. USDC, a U.S. dollar-backed stablecoin, is available on Bitcoin ATMs and is backed on a one-to-one basis against the U.S. dollar. Their usefulness is highlighted in the following examples of the use of Bitcoin ATMs:
- In 2014, Bitcoin was valued at just a few hundred dollars apiece. People who purchased it at the first licensed U.S. Bitcoin ATM launched that very same 12 months in Seattle, Washington, potentially saw a significant increase, with the price of Bitcoin now closer to $70,000 per coin.
- The mother sent money to her daughter, who was studying abroad in Italy and needed money ASAP to repair her automotive. She found a mechanic, but didn’t have enough money to pay him. The mechanic accepted Bitcoin, so she asked her mother to make use of the Bitcoin ATM and send her the funds. The mechanic received payment inside minutes.
- Immigrants in the US should buy USDC for money at ATMs to send a reimbursement home, where the recipient can collect the money in their local fiat currency.
Bitcoin ATM capabilities
Bitcoin ATMs are a great opportunity for businesses with a physical retail location. Retailers can earn rent on hosted ATMs and increase foot traffic to locations. Alternative arrangements allow retailers to receive a percentage of each transaction fee. Retailers should only work with licensed, insured operators and have the appropriate authorizations AML conditions and procedures.
The most vital profit of hosting a Bitcoin ATM is attracting customers to retail locations. Sites like Coin ATM Radar list ATM locations, which is essentially free promoting. Bitcoin ATMs may also be searched using Google Maps and are often listed with hosting firms. Customers who purchase cryptocurrencies at ATMs are more likely to make repeat visits and purchase other items. In this manner, they create a win-win partnership between the retailer and the Bitcoin ATM operator.
The future of Bitcoin ATMs
Crypto-winter has contributed to the consolidation of the Bitcoin ATM industry and has reduced the number of Bitcoin ATM operators to a few key players in early 2024. However, as the consolidation of Bitcoin ATM installations begins to extend again and analysts tout an optimistic outlook for cryptocurrencies in 2024, Bitcoin ATMs are more likely to remain a key pillar of the crypto economy – but what’s going to occur in five to 10 years?
Despite the rapid adoption of digital payment methods, money is still one of the most generally used types of payment in the United States. More than 18% all transactions in the US are still done in money. Moreover, the money is unique because there is no chargeback risk. People using a Bitcoin ATM can immediately access their purchased Bitcoins and then send them on-chain as a form of money transfer or payment.
Although Bitcoin ATMs provide a priceless service, their high cost is the best argument against them. Hardware, vendor rental, software, money logistics, and service, among others, can make running a profitable Bitcoin ATM very expensive. It could also be less expensive to enable cryptography on existing ATMs and kiosks to permit people to exchange cryptocurrencies for money.
This will be done via an API, eliminating the requirement to deploy cryptographic hardware. Over time, we are going to see more and more legacy financial institutions partnering with the cryptocurrency industry to supply cryptocurrency purchases and sales to their clients in order to stay competitive and meet market demand.
It’s necessary to do not forget that Bitcoin ATMs replaced the humble beginnings of cryptocurrencies, when strangers met in person to exchange USB flash drives full of Bitcoin for money. In a world of multi-currency digital currencies, physical and digital channels might be connected to make cryptocurrency deposits and withdrawals, providing a seamless experience and removing barriers to the blockchain-based economic system. Bitcoin ATMs will proceed to grow in popularity and might be an necessary aspect of this ecosystem for years to come back.