Category Archives: Operating bitcoin ATM

Revenue and costs of running a bitcoin ATM

Bitcoin ATM industry is growing fast. There are several new bitcoin machine installations worldwide daily. Existing bitcoin ATM operators increase number of machines in their networks, as well as new operators join the market. Even on the production side, there are new manufacturers developing their products and coming to the market with new bitcoin machine models targeting different segments and niches, e.g. recently were added BitTeller, Bitlox, BitConcept on our site.

Running a bitcoin ATM is an interesting business opportunity in the new era of digital currencies, however, sometimes the lack of information keeps people away as they don’t know where to start, or get any practical estimations of how much you can earn with a bitcoin ATM. In order to increase transparency Coin ATM Radar conducted a survey with a number of bitcoin ATM operators to find out what are current metrics of an average bitcoin ATM business.

Revenue and costs of bitcoin ATM

Before going any deeper we recommend to read:

Now back to survey. It was sent to 24 operators in total, 11 responded either in full or skipping some questions due to not wanting sharing info, although it was mentioned that none of info will be associated in any form to the company or person responding. Even limited info we received gives a good estimation of level of costs and earnings one should expect.

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Bitcoin ATM settings for hot wallets and exchange integrations

In the previous article we covered exchange and counterparty risks of operating a bitcoin ATM and two general ways to do it: sell bitcoins from your hot wallet, or do mirror deals via bitcoin exchange.

In this post we look at what system settings are supported by main bitcoin ATM providers, namely: Lamassu, General Bytes and Bitaccess. Other large supplier of bitcoin ATMs — Genesis Coin was reached but didn’t provide details about their setup options.

Lamassu

lamassu

Lamassu bitcoin ATM has an open source code. This allowed different developers to take the code and build software upon it. E.g. Dash implementation is done by external party, Ethereum was also implemented by external party first and later on Lamassu added their own version of ETH official support.

Based on information provided by Neal Conner (Customer Service Manager) Lamassu bitcoin machines support the following settings currently:

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Risks of running a bitcoin ATM business

Running a bitcoin ATM brings a lot of opportunities. On the other side such a business brings a lot of risks too.

This post concentrates on two of the main risks which bitcoin ATM operators have to deal with and choose which way to follow:

  • Exchange rate risk;
  • Counterparty risk.

For simplicity reasons lets look at the case when bitcoin ATM allows buying bitcoins for cash, not selling. Every bitcoin ATM operator chooses how to run a bitcoin machine in this case:

  • By using own bitcoin stock;
  • Through exchange mirroring deals.

Selling bitcoins from own stock

This scenario is illustrated on the following diagram (click to enlarge):

Operating bitcoin ATM from own stock bitcoins

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Why developing your bitcoin ATM brand is important and how to do it

Why you need to create and promote your bitcoin ATM brand

Almost every day there is a new bitcoin ATM installed somewhere in the world. Most of the locations are in the U.S. and as it was mentioned in previous posts there is a concentration trend continues in bitcoin ATM industry.  Concentration happens on both levels: geographical level (bitcoin ATM locations are not evenly distributed with some peak numbers in particular cities) and operator level (there are some big players appeared on the market that have many bitcoin ATM machines installed). Two trends are interrelated as the same operator may want to locate machines in the area where the company or owners are located. However, some bitcoin operators have nationwide or even worldwide networks.

Bitcoin NW bitcoin machine branded
BitcoinNW bitcoin ATM installed in Portland

With these trends in place it is very important for bitcoin ATM operators to distinguish their machines from competitors’. There are many reasons for this, but the main ones are:

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Bitcoin ATM installations peaked

With bitcoin price rise the speed of bitcoin ATM installations also accelerated as there is a spike in number of bitcoin ATMs appeared in the last two weeks. Bitcoin ATM operators probably had to pre-order machines quite a while ago, so it is more a thorough calculation based on expected transaction volumes and potential growth. But as bitcoin machines are installed in many places and by independent operators – this fact shows that running a bitcoin ATM is a profitable business.

Bitcoin ATM installations per day

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How to start a bitcoin ATM business

According to our bitcoin ATM industry stats, there is a growing number of bitcoin ATM installations worldwide. If someone wants to run his own bitcoin ATM or install a bitcoin machine at existing local business, what are the main points to check and decisions to make beforehand? The following article tries to answer these questions.

Start a business

Regulation

With all developments in Bitcoin area over last couple of years one thing became more prominent — regulation. Bitcoin ATM business is not an exception. In many jurisdictions you need to get special licenses like MSB or others in order to conduct such a business. Running a bitcoin ATM without complying with law might end up bad. So the main point to start investigating in case you would like to run a bitcoin ATM — is the legal framework for such activities in your region. Continue reading

Check and report bitcoin ATM status

We’ve launched a new functionality on our website of tracking bitcoin ATM locations – reports of any bitcoin ATM’s state as working or non-working. There were many complaints when someone did a long journey to bitcoin ATM just to find out that machine is not working or is simply not there anymore.

We update the site regularly as soon as we find or receive information about any changes, but sometimes this is not enough.

New functionality allows anyone to report any bitcoin ATM as active (working) or as non-working / removed by simply upvoting or downvoting a particular bitcoin machine and leaving a short feedback for reference.

Since launch the functionality have already been used by several users, e.g. somebody reported bitcoin ATM in Bucharest, Romania as working:

Bitcoin ATM Romania working

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