Bitcoin Depot ATM

A Chat With CoinFlip About Bitcoin ATMs

In this interview held in December of 2019, you will hear Daniel and Dustin from one of the largest Bitcoin ATM Operators – CoinFlip talking about the business.

In the beginning, Daniel talks about the difficulties they had to overcome when they started. Apart from the regulations and obtaining the AML policy, which they learned that needs to be done on the example of Charlie Shrem, he states the cash flow as one of the unexpected drawbacks they faced. He explains that it takes a week for an armored car to pick up the money and two more days of processing, so it’s a nine-day lead time on the cash that they need so they could buy more bitcoin and keep the business expanding.

Later on, he explained why aren’t they adding a credit card option to their machines. It’s simply because you can use the card to buy online so you don’t need to go anywhere, while you need to deposit cash somewhere physically. So, they offer the option of buying crypto with a credit card on their site, but they don’t see the point of adding it to the machine itself.

Dustin than jumped in talking about how Bitcoin ATMs are the roots of adoption explaining how it was the only way that he could acquire crypto when he was underaged, which eventually led him to join CoinFlip.

When talking about the coins other than Bitcoin, Dustin says that their machines adopt Litecoin, Ethereum, Tron, Komodo, and ChainLink. Their listing process is similar like in an exchange, there is a lot of due diligence and considering a lot of different factors like community volume. Daniel then explained how they also need to make a difference between real cryptocurrency and coins masquerading as a stock because they can’t sell those.

Censorship is a big thing in the crypto world, and they talked briefly about that, citing examples of people that got their bank accounts blocked for using them to by Bitcoin, and even blacklisted so other banks won’t take them. The main point is that by using ATMs people won’t encounter these problems.

Dustin then talked about their plans for 2020, and it is to add more ATMs rapidly, with about 15-20 machines a week. Then he mentioned the locations saying that they want to mix it as much as possible and be present in all types of locations, and not just the big cities. On the other hand, Daniel states that he is a fan of 24/7 gas stations and convenience stores because of their work hours, parking and privacy they offer.

They also touched upon a percentage that some operators take and how it can negatively affect the adoption. For instance, if the fee is 20% and a person is a first-time crypto buyer without any knowledge, he can think that that is a standardized fee that all ATMs take, and after realizing that he should then wait for price to jump 20% just to break even, he could be discouraged to continue using crypto. By the way, CoinFlip has its fee at a reasonable 6.99%.

Another important topic is security, so Dustin explained how CoinFlip is protecting its customers. First of all, the user will receive a text message with a verification code, secondly, there is a delay on the ATM warning message so the user can’t skip it and he is pretty much forced to read it. Also, for those who are registering for the first time, they will be contacted by the CoinFlip support to confirm the identity.

Up next was the design of the machine, where Daniel talked about how they are trying to get away from the legacy ATM design and make their machines look more futuristic, even though they still call them Bitcoin ATMs. While Dustin talked about how they are performing monthly software updates in order to make the interface as much as user-friendly as possible having in mind that a lot of the people are first-time users.

To summarize, when running a Bitcoin ATM Operator business, cash flow can be a major setback. The Operator should be extremely careful and take in mind various factors when listing in a new coin into its ATM. 24/7 petrol stations and convenience stores are probably the best locations for Bitcoin ATMs. The fee shouldn’t be too high because it can have a negative effect on crypto adoption.

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