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Bitcoin ATM Adoption Is on the Rise

Bitcoin ATM Adoption Is on the Rise


BitcoinBusiness

Good news for your Bitcoin wallet: strange things are afoot at the Circle K. The deployment of Bitcoin ATMs is on the rise and may be coming to a gas station or bodega near you. Circle K has announced plans to install Bitcoin ATMs in their stores. This move comes alongside the announcement by Salvadoran president Nayib Bukele to to deploy 200 Bitcoin ATMs across the country.

An Emerging Market

The adoption of Bitcoin ATMs is on the rise. As of this reporting, there are an estimated 25,000 Bitcoin ATMs worldwide. In the U.S., Bitcoin Depot, one of the leading bitcoin ATM operators, boasts over 100 locations across the U.S., extending into Canada. Bitstop boasts over 1,000 locations in the U.S., including Puerto Rico.

A Boon for the Unbanked?

Bitcoin ATMs offer users options to purchase bitcoin with various payment methods such as cash or credit and debit cards. Beyond the benefits of convenience of offering Bitcoin users an easy translation while running daily errands, the potential impact of the increase in Bitcoin ATM adoptions entail a potential benefit for social justice. A major feature of the ATMs is the ability to empower the “unbanked,” individuals who are traditionally of lower economic classes and cannot access traditional banking. It is estimated that 10% of New York households are unbanked — worldwide, the number of unbanked adults is estimated to be around 1.7 billion

The future looks bright for the adoption of Bitcoin ATMs as Bitcoin bounces back from the crackdown in China and more global locales open up to miners as a result of the Great Hash Rate Migration. El Salvador’s move to adopt Bitcoin as legal tender within the country could mean pressure for other Central and South American nations to make similar moves as well.

Challenges to Adoption

Though there are many positive benefits to the increase in Bitcoin ATM availability, there are some key challenges to their widespread adoption. Jorge Fernandez, chief development and marketing officer for Powercoin and Bitstop, is quoted as warning that the BTM market and ATM market are not the same and that the BTM business offers unique challenges, including key demographic markers, user mindset, and the need for further research into what makes a good location for these machines.

Concerns over Predatory Operators Spur Coalition-Building

Though BTMs have the capacity to empower the world’s unbanked population, some concerns about transaction fees could mean a higher burden for this portion of the global population amid a growing market of bad-faith actors. How Many Bitcoin ATMs, a non-profit group of volunteers and researchers from MIT and Stanford, offer alternative analytics to assess and track Bitcoin adoption. A data visualization on their site compares Bitcoin ATM fees per vendor and highlights a troubling trend of high, fixed percentage fees on each transaction, with vendor National Bitcoin ATM currently sitting at a 30% fee. A typical ATM transaction fee operated by a traditional bank comes in at between $1.50 to $10 for an in-network transaction, with additional costs for non-network operators and a fee of up to 3% for international transactions.

In part to address concerns about potential predatory practices, and to add legitimacy to the BTM industry, a number of Bitcoin ATM operators recently announced the creation of the Cryptocurrency Compliance Cooperative. The alliance, comprised partly of DigitalMint, Coinsource (both BTM operators) and Chainalysis, is aimed at creating a “safer environment for all consumers” and seeks to “legitimize the cash-to-cryptocurrency industry by bolstering compliance standards.” According to the press release, the CCC aims to create a coalition of various stakeholders and “look to stay ahead of developments and trends among threat actors, learning how to best mitigate fraud through the application of ever improving technology and forensic tools.”

Though the concern for predatory use of BTM technology is clear, it remains to be seen to what degree the need for safety and risk mitigation will be balanced with the need to maintain decentralization.

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Dr. Jeannie Bennett is a post-academic and technical communicator with over 13 years of experience. She is a freelance writer and editor with a passion for information visualization.



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