The technology has existed for years, and there are thousands of them around the world. So why haven’t we seen an explosion of new ones? Why did it take so long for them to get off the ground in the first place? And why do they still seem so rare?
Bitcoin ATMs are expensive
A Bitcoin ATM can cost up to $5,000 to purchase from a manufacturer and includes the hardware necessary for a teller’s computer terminal, including a monitor, barcode scanner, receipt printer, and card reader. However, these items can be rented separately at a lower cost of around $1,000 per month.
It needs two software components to fund the machine with cash or bitcoin. One manages the transaction process (the ATM application), and another communicates with bank accounts (the POS system). These systems are available through third-party providers who charge a fee for their services. Some charge percentage fees based on transactions, while others charge flat fees depending on how many transactions occur each month.
Additionally, maintenance costs are associated with keeping both ATMs secure and operational. These costs can add up quickly if you’re dealing with large amounts of cash daily!
There’s a lot of regulation
There are few Bitcoin ATMs because of the lack of government regulation.
Like any other currency, Bitcoin is not regulated by any government agency. It’s a digital currency that doesn’t have coins or bills and has no central bank. It’s decentralized: there are no rules on who can use Bitcoin and how people should use it.
That means that unlike other currencies, which may only be exchanged in certain countries or between certain types of people, anyone can buy Bitcoins and exchange them for other currencies as they see fit.
Bitcoin also isn’t a scam. Its lack of rules makes it safer than most forms of payment because there’s nothing stopping someone from buying something with fake money!
Bitcoin ATMs are time- and energy-consuming
The first reason is that setting up a Bitcoin ATM is time- and energy-consuming. The US, for example, has specific rules about the types of businesses that can operate ATMs in their establishments. To be legally permitted to do this, you must apply for a money transmitter license through FinCEN, which requires filling out an application and submitting documentation proving your identity, among other things. That can take weeks or months to receive approval — if you ever do.
But even then, there are still more steps. Now that you have the license, it’s time to find a location where the owner is willing to install an ATM in their establishment. That requires negotiating fees with them. These fees vary based on location but can range from $500–$1,000 monthly, depending on foot traffic. Additionally, factor in how much revenue they anticipate making from those customers’ purchases when they spend their cryptocurrency there.
People don’t understand them
There are several reasons why people don’t know how to use Bitcoin ATMs:
- They’re a relatively new technology and unfamiliar with it.
- Only some have heard of Bitcoin in general or even understand what crypto is.
- If your grandmother doesn’t understand something like this, she probably isn’t going to go out of her way to find out more about it.
Additionally, some people do know how to use them but feel uncomfortable using them. They need to become more familiar with the process or feel it’s too risky for their needs.
There are many reasons why Bitcoin ATMs might not be as ubiquitous as expected.
That is not to say that they aren’t a good investment for companies like Lamassu or Robocoin. It just means that if you want to invest in them, do your research first.
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