The above podcast features different interesting topics and guests, with one of them being the CEO of Coin Cloud, Chris McAlary. He talked about the business of Coin Cloud and shared some insight on the future of Bitcoin ATMs and the possible risks.
Unlike other students coming out of college, Chris didn’t get a regular job. Instead, he decided to move to Las Vegas and play online poker. That went well until the so-called Black Friday when the department of justice decided to shut down online poker and lock the funds. That helped him understand the power and importance of not having your funds under custody. This was back in 2011 when he just started to hear about Bitcoin, which made him easily figure out that a lot of his previous problems could be prevented if he held his money in Bitcoin.
So he started mining in his garage and advocating Bitcoin to his friends and family. Shortly after he noticed the problem of acquiring Bitcoin in the early days. Your options were to mine or wire the money to Japan. None of them were perfect. Then, in 2013 Chris attended a conference where he saw a behemoth Bitcoin ATM prototype called Robocoin. He immediately got interested and after some consultation with his roommate who happened to be a lawyer, decided to buy the machine and set up the first location in Las Vegas in 2014.
The Coin Cloud
The Las Vegas-based Coin Cloud has 240 employees and 4500 locations, with a number of amazing retail partnerships like H-E-B or 7-Eleven. So, if you’re at the checkout counter somewhere there’s a big chance that you’re gonna see one of their machines. Financially, the Coin Cloud is close to billions in sales this year. So, it’s impressive what an ex-poker player created in about 7 years.
Chris also mentioned the value they bring to the retail partners. First of all, they are paying rent for a 1.6 square foot space in the store. That alone makes them a number one revenue per square foot. Additionally, the Coin Cloud ATM will attract around 300 people a month to the store, which is a nice foot traffic increase. This comes as a result of all their machines being two-way and attracting both buyers and sellers. Of course, both these benefits can really stand out in the smaller stores.
The 24/7 customer support is another thing Chris is proud of. A customer can call them any time to ask anything from “what crypto is?” to “where can I find the nearest Bitcoin ATM?“. The goal of Coin Cloud as a company is to remove the stigma from cryptocurrency and build customer trust in order to expand the community.
What is the target group?
One of the things that Chris pointed out is that Bitcoin ATMs are cash to crypto businesses and there’s no bank intermediary. Having in mind that cash is used in more than 30% of transactions, Bitcoin ATMs are mostly used by the unbanked and underbanked people. He says that you can get millions of different use cases by being able to just go and turn your dollars to crypto easily, and vice-versa. As an example, he talked about how at the beginning banks held an embargo on the accounts related to crypto, meaning that they would lock your account if they see a payment from Coinbase or Gemini.
Chris also took Brazil as an example to talk about the cash-oriented markets. Apparently, 50% of people out there are paid in cash and are not connected to the legacy banking system. This results in a large quantity of much smaller transactions on Bitcoin ATMs. Coin Cloud acknowledges the trend in Brazil and aims to work on education to improve the adoption.
The KYC policy
The KYC procedure at Coin Cloud is very similar to most of the other ones. If you want to trade up to $1,000 worth of crypto a day, you can just use your phone number and that’s it. They wanted to make the experience as easier as possible for the newcomers.
Then, if you want to set the daily limit at $8,500 you’ll gonna need to take a selfie and scan your driver’s license so they can check if you aren’t on any terrorist watch lists or anything like that.
And, if you want to go above and beyond you can share your social security number and move the daily limit up to $25,000 per day.
The Future and the Risks
Chris believes that crypto technology is going to be behind all personal and corporate finance in the 21st century. This means that over the next 50 years, wherever there’s a legacy ATM there will be a Bitcoin ATM at its place or next to it. And, just to put things into a perspective, there are around 4 million legacy ATMs out there. So the scope is massive, and he doesn’t see the market slowing down anytime soon.
The biggest risk in Chris’s opinion could be some crazy regulation that might come out as a result of a misunderstanding. He says that they encountered some weird stuff at the state level in Washington, but he is sure that these are just short-term issues, and that in the long run, the regulators will get it right. He is positive that the United States will recognize crypto technology as a centerpiece of the future economy, and that in the future it will just be a matter of education and interaction with the regulators so they can make smart and informed choices.
Summary
By listening to Chirs McAlary’s presentation we found out that Bitcoin ATMs are the easiest way of transferring your money to crypto and vice-versa. Their value is seen by the unbanked or underbanked people around the world, as well as the business owners who can increase their revenue and foot traffic by placing them in their stores. The future is bright for Bitcoin ATMs, with the biggest hurdle being the education of the regulators. When that one is overcome, there’s no one that can stop the untapped potential of crypto.