Meaningful steps toward adoption: Bitcoin ATMs
People talk a lot about the concept of cryptocurrency “adoption” but sometimes it is hard to truly visualize what this will look like, given the current landscape. As of right now, the cryptocurrency space lacks infrastructure and overall is still a very immature market. One of the largest bottlenecks currently is efficient on and off ramps for fiat into cryptocurrency and vise versa.
Currently, the “convenient” and popular on and off ramps are mainly online exchanges. Most of these exchanges require full KYC identification as well as have a wait time to receive the fiat into the account. While there is sometimes a wait time for the fiat to transfer in, there is also occasionally a wait time to actually receive your coins once you have made the purchase. The wait times that some online exchanges require can prove to be very inconvenient in an incredibly volatile market.
While a major step toward any sort of adoption would be for everyday retailers to accept cryptocurrencies as payment, another step would be making it accessible to everyone. The current landscape of KYC exchanges and navigating an online exchange interface is somewhat technical, and would not be appealing for an average person trying to use the currency.
Recently, Bitcoin ATMs hit a landmark of 4000 ATMs online. While this number is dwarfed by traditional ATMs, it is huge growth for Bitcoin. The number of Bitcoin ATMs online has nearly doubled in 2018, reaching an all-time high at 4000. Bitcoin ATMs being accessible to the average person will be a large step in any sort of mainstream adoption. In a scenario where people may need Bitcoin or another cryptocurrency to buy a good or service, it would be convenient for them to be able to walk up to a Bitcoin ATM that was close by and load up on the digital currency.
Mark Toner, a writer for ThirtyK, a blockchain news company, put it simply that “Bitcoin ATMs don’t require their users to have a traditional checking or savings account, so people can insert cash and instantly buy Bitcoin.” Currently, North America controls over 70% of the Bitcoin ATM per John Nordsted at “Bitcoinist.” An important part of the story to point out here is that operators and manufactures of the ATMs are not only focused on Bitcoin, and 6 out of every 10 ATM machines supports various altcoins. The altcoins that are generally supported are Litecoin, Ethereum, DASH, Monero, Dogecoin, and Zcash.
A flaw in the current Bitcoin ATM ecosystem would be the fees associated with the transactions. Currently, buying and selling a cryptocurrency through an ATM comes with a roughly 8% fee. The fee structure is obviously not ideal, but you are paying for the convenience of a fast cash in, cash out option.
With the majority of crypto twitter wanting a “bounce” after a long 11-month bear market, something like that may not happen until there is the proper infrastructure is in place. While the amount of Bitcoin ATMs has nearly doubled this year, I would want to see growth similar to this if not more throughout 2019 in order for this infrastructure growth to continue to develop in a meaningful way. In no way am I saying Bitcoin cannot succeed without the proper number of ATMs, it would just be encouraging to see the infrastructure growth continue. The more ATMs that pop up in shopping malls or restaurants the more retailers and businesses will be pressured to begin to accept cryptocurrencies as payment. In conclusion, there has been an immense growth in Bitcoin ATMs throughout 2018. I could see the ATM growth potentially acting as a catalyst for the “average” person to get interested in cryptocurrencies, and infrastructure developments like this will be imperative for a potential future path to adoption.
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