In this interview held in September 2017, Kenn Bosak speaks with CEO of RockitCoin Michael Dalesandro about Bitcoin ATM’s.
Michael started in the trading business in the pitch Chicago Board Options Exchange back in 1990, after which he created a first social network travel company built on the back of Facebook. After it built up to over 10 million members he sold it to Expedia. After that, he needed to figure out what’s next, and after researching the blockchain and got interested, he decided on Bitcoin ATM’s, as it was the closest to the money that he could go as he was learning the business. Now he owns the third largest Bitcoin ATM company in the USA.
What is one of the biggest hurdles of being a Bitcoin teller machine?
The way I define it is that there are three main hoops: compliance, operations, and customer service. That is because bitcoin machines are 24 hours.
This August started with a Bitcoin price of $7,571 and continued to decrease until it hit the lowest price $6,051 somewhere in the middle of the month. After that, the prices started to grow nearing the end of the month. August ended with a Bitcoin price of $7,248 which is a 4,3% decrease compared to the price at the beginning of the month.
Unlike the price fluctuating trajectory, the number of new machines continues to grow. Compared to the previous month, the growth was considerably higher in August.
Period Start: 3486, Period End: 3662
Opened: 241, Closed: 65, Net Growth: +176(+5.0%)
Paul first heard of Bitcoin back in 2012 and really did not pay much attention to it, like most people and over the years he thought it was cool technology, but never really sunk in until 2 years ago. In 2016 the Bitcoin got really crazy so he started to go down to the Bitcoin rabbit hole. As he became more and more passionate about the technology he really wanted to do something different. With a help of his friend he bought his first 3 machines and started his business. He also states that in order to go into the Crypto ATM business you need to be passionate about the technology and to understand how the money works.
Article is provided by Jennifer L. Moffitt, a privately practicing attorney. Contacts can be found at the end of the post.
In the United States, virtual currency, such as Bitcoin and other similar coins, and virtual currency exchanges have been subject to federal regulations, with taxation and financial crimes the most prominent regulatory issues. However, it is at the state level that regulation of virtual currency has been most contradictory. The U.S. states have mixed responses to the emergence of cryptocurrency. Some of the states have ignored cryptocurrency by not implementing or amending any laws that address virtual currency. However, other states have taken action with some states somewhat hostile towards virtual currency while other states are more welcoming. In a number of states, the response towards cryptocurrency is currently ambiguous with no actual position taken. This discussion will attempt to categorize regulations by restrictions placed on virtual currency and identify states by category of regulation. In addition, the implications and effects of widely divergent state level legislation and regulations will be examined.
State Level Cryptocurrency Regulatory Tools
There are several regulatory tools used by states to regulate and control virtual currency. These include money transmission laws, licensing requirements and regulatory guidance. A brief summary of these tools is provided below.
In the following video from TabConf held in January 2018, Brandon Mintz, the president of Bitcoin Depot, talks about the value of bitcoin ATMs during Bitcoin’s mainstream adoption.
Bitcoin Depot is an operator that works with Genesis Coin, and at the moment of this conference, they had 104 machines installed. As he says, there was a rise in demand for a more physical feel when having cryptocurrency transactions that are more similar to cash ATMs and provides people with a trust factor.
Bitcoin ATM industry grew over 2017 year with accelerating speed. Back in 2014 we did a forecast of how many installations of machines there will be in several years. You can find the table at the end of the post on comparison of traditional bank ATM growth vs. bitcoin ATM growth. The forecast was done based on bank ATM installations back in 1970-s. After 7 years we assumed there will be 2900 ATMs installed worldwide. Today (~4.5 years since first bitcoin ATM installation) there are already more than 3000 ATMs installed worldwide. And the speed if installations is only accelerating over previous years:
In this article we look at one of the most important problems bitcoin ATM operators have — finding bank relationships and opening a bank account.
At the end of the post there is a company mentioned that provides services as intermediary and connects bitcoin ATM operators directly with bitcoin friendly banks also providing additional services on the way.
Disclaimer: We are not affiliated with this company, please do your own due diligence before entering in relations. The material is posted and contacts are provided because in our opinion it brings a value for many operators who potentially need banking relationships, but struggle to find it.Continue reading →
One of the main topics to research is regulation and what is needed to be done to properly register such a business. This is very important to do in right way from the beginning if you plan to do it professionally long-term and with potential to grow your bitcoin ATM network in the future.
Disclaimer: Information provided in this article is a general overview of current regulation found in public sources. It should not be taken as a legal advice. It is recommended to contact local lawyer in the area where you plan to operate machines. You can find several contacts at the end of this post.
With a trend of growing number of bitcoin machine installations worldwide many business owners start to consider hosting a bitcoin ATM at their premises. This post is supposed to help take a decision about how to house a bitcoin machine.
Generally there are several ways of doing it:
Organizing all on your own and later on also self operating machine(-s);
Finding someone who will be ready to finance and install machine at your location;
Some options in between the above two scenarios.
Operating bitcoin machine on your own
When not to pursue…
The first option is rather a tedious task. Running a bitcoin ATM is a separate business by itself. In order to run a machine one should do all preliminary research work, e.g. finding out what is the legal status of such a business in the area and which licenses are required, then generally obtaining all permissions to do it within legal framework, which is usually time requiring and costly process. Apart from initial investments in legal advice services and obtaining permission, and then investment in machine hardware itself, business owner also will need to organize and maintain running of a bitcoin ATM on ongoing basis. This means to provide liquidity for bitcoin machine operations, and also organize the exchange process and provide all connected services, e.g. customer support.
In this post we look at how operators can organize supply of bitcoin ATMs with liquidity. For simplicity purpose only buy bitcoin transactions (sell bitcoins to customers) are considered.
When running a bitcoin machine every operator needs to provide it with liquidity. Usually this is done via using own capital (fiat and BTC) in order to fund hot wallet (from where bitcoins are sent to customers) or additionally holding some liquidity on bitcoin exchange (fiat currency liquidity), which is converted to BTC when transaction happens to lock exchange rate and laterto replenish hot wallet for future transactions. You can read more details about it in Running bitcoin ATM from own hot wallet or Operating bitcoin ATM via exchange.