In the below video, you can hear an interview with Zach Harvey, the CEO of Lamassu, one of the biggest Bitcoin ATM Manufacturers on the market. He shared his thoughts about the cryptomarket and the way it is heading, as well as his insight into the Bitcoin ATM business, Specifically, what differs it from the exchanges and what is the worldwide coverage.
Interestingly, before becoming a successful crypto entrepreneur, Harvey owned a guitar store with his brother in Israel. As they were starting to adopt the libertarian philosophy at some point, and developing ideas about a decentralized marketplace, the concept of decentralized currency emerged naturally in their minds and was just an obvious next step. It took them some time to gain trust in Bitcoin, but after some persuasion from their libertarian friends, in 2011 they started offering to sell guitar gear for Bitcoin at their store. Of course, they were the first store in Israel to do so, and sure enough, nobody ever paid them in Bitcoin for anything at that time.
After closing the store, and moving to New Hampshire, the most libertarian state, they started attending different conferences and meetups to learn as much as they can about crypto. But at the same time, they were getting jealous of people in the bitcoin business. That brought them to an idea to demonstrate their concept of Bitcoin ATM. So, they brought a simple wooden orange box to one of the conferences without any real hopes to make anything commercial. But, to their surprise, the people just went crazy and started hyping it on social media. Only after getting the first emails from investors, they decided to drop everything and start Lamassu, which got its name after an Assyrian deity that is a protector of households.
Exchange VS Bitcoin ATM
One of the main things they talked about in this interview was the difference between the Exchanges and ATMs from Harvey’s entrepreneurial standpoint. He claims that exchanges have all kinds of different levels and layers of operation, and are essentially centralized. In practice, this means that a US exchange needs to get licenses from all 50 states in order to operate properly, which generates a lot of startup costs and risks.
On the other hand, when manufacturing Bitcoin ATMs, you just need to develop a machine and software and leave the compliance and other legal stuff for the Operators to handle. This business model agrees with Harvey’s libertarian idea of decentralization. In addition, Lamassu made their software open source, so even if they stop working for some reason, their customers would still be able to operate the machines. This is a pretty cool thing to do, having in mind that there was a lot of uncertainty involved back in the day when they started the company.
Decentralization is one of the main traits of Bitcoin ATM, in the sense that its transactions are non-custodial. In other words, the operator never holds on to your Bitcoin, you just put in the cash and receive the crypto immediately. Same thing when you sell. You transfer your Bitcoin and receive the cash on the spot without a need for a bank account of any kind. This is a good feature nowadays when a lot of banks will stop working with you if they register a crypto-related transaction.
While, as we mentioned, the exchanges have a bit more centralized vibe going on where you buy and store your currency at the same place, which really resembles a banking system when you think about it. And centralization is not something crypto is based on initially.
Talking about the Bitcoin ATM presence in different countries, Harvey confirmed something most of us probably already knew. The US is by far the biggest market for Bitcoin ATMs in the world. The numbers are also getting higher in Canada and no other country can even get close when it comes to the total number of machines.
He mentioned that Lamassu sold some machines in Israel and Bulgaria, and received an increased interest from Colombia and Venezuela which actually makes sense having in mind the inflation and all the crazy stuff going on the monetary side.
Harvey admitted that he is not sure if the real reason for a lower interest outside North America is the price of Lamassu machines or that the rest of the world just hasn’t discovered the need for a Bitcoin ATM.
The Future of Lamassu
Although they have more than 650 machines worldwide, one of the main goals for the company is to expand. Especially to the markets where there is no saturation. Harvey explains that Europe will be one of their focuses. Specifically getting more machines to France and Germany. There is also Asia and in Harvey’s opinion, North America is still not completely covered. So, let’s see if they get to a thousand in 2022.
Apart from expanding, they are also developing new models. One of the machines they are working on will be of larger scale with a purpose to accept a much larger amount of bills, and to do that very quickly.
Adding altcoins is also on their agenda. They currently support 6 different cryptocurrencies and they plan to add more, including stablecoins.
Listening to what Harvey had to say, we can conclude that if you plan to start a crypto-transaction business, it is much easier, cheaper, and less risky to invest in Bitcoin ATMs than in the actual exchange. Bitcoin ATMs also provide a more decentralized flow, which is what crypto stands for. For any new Manufacturers, the sure thing would be to target the North American market and later expand to the rest of the world.