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.

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Bitcoin ATM Operators Growth and Survival Statistics

Public opinion about bitcoin ATM business varies, but mostly it is split into two radical sides: either “machines are not used by anyone and hence operators don’t make any money”, or “the fees charged are usually so huge, probably operators do a lot of money”. Obviously, both extremes do not correspond to reality, as if it was not profitable, there would be not that many businesses doing this long term, on the other hand, the fee size is dictated by market and there are plenty of various costs and risks associated with this business.

In this post we analyze historical data available on the website about operators growth and closure of activities. We analyze activity of total 870 operators on the website, since October 2013, when the first publicly accessible ATM was installed, and up to the end of January 2020.

Number of crypto ATMs by operator
Number of ATMs per each operator over time

The chart above summarizes information, that is used as a source for analysis — number of ATMs installed by each operator on the 1st day of each calendar month.

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Bitcoin ATM Market Dynamics January 2020

The Year 2020 had a good start when it comes to the price of Bitcoin. The price at the beginning was $7,168 and continued to rise at a pretty stable rate. January ended with a price of $9,502, which is a 32.5% increase when compared to the beginning of the month.

The number of new machines continued to grow at a relatively stable rate, as the price of Bitcoin.

Period Start: 6377, Period End: 6705
Opened: 432, Closed: 104, Net Growth: + 328 (5.1%)

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Zach Harvey CEO of Lamassu – Crypto ATM Overview

In this interview, you will hear Zach Harvey, the CEO of Lamassu talking about Bitcoin ATMs in general.

In the beginning, Zach made an interesting explanation of why Switzerland is the country to be in when operating a Bitcoin ATM manufacturing business. They started doing their business on Virgin Islands, New Hampshire and Bulgaria. After the latter relationship terminated they had to operate without a bank account for over a year, and they finally managed to get the account in Switzerland. So it started off about with just being about a bank account, but later they fell in love with the level of stability and the complete community there. They are impressed with how the government accepts crypto and talks about it like a completely legitimate thing and embrace the fact that they issued licenses to two Crypto Banks in the past year.

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Peter McCormack’s Bitcoin ATM Podcast #1 – Operating Bitcoin ATM with Gil Valentine and Eric Gravengaard

Peter McCormack in his series of podcasts covers bitcoin ATM operations from various angles. If you are looking into operating of bitcoin ATM’s the full series of 5 episodes will be an interesting listen.

The first episode is with Gil and Eric from Athena Bitcoin, one of the largest operator on the market. They also one of operators who expanded business over national border and installed ATM’s in Argentina and Colombia.

Gil and Eric met 5 years ago and thought about business opportunities of getting into the money flow related to cryptocurrencies. In late 2014 they started a business with several ATM’s in Chicago area and saw an immediate demand. Then expanded business to other states and countries with currently 65 ATM’s in the U.S. (in 8 different states), 22 in Colombia, 11 in Argentina, and are looking to expand into Mexico.

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Bitcoin ATM Market Dynamics December 2019

The last month of 2019 saw the price of Bitcoin fluctuate a bit. December started with a price of $7,361 and maintained a steady flow until mid-month when it decreased to $6,602. After that, it increased again and at the end of the month, it was $7,232. As we can see, the price encountered a small decrease of 1.8% when compared to the price at the beginning of December.

The number of new machines continued to grow at a relatively stable rate, unlike the change in the price of Bitcoin.

Period Start: 6049, Period End: 6393
Opened: 447, Closed: 103, Net Growth: + 344(5.7%)

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Interview with Josh and Zach from Lamassu at The Block

In this video, you will see Kevin Loaec interviewing Josh and Zach Harvey, co-founders of Lamassu. They are pioneers in Bitcoin ATMs, and they are hiring!

In the beginning, Josh and Zach talked about their interesting decision to manufacture their machines in Portugal. As they were looking for an industrial designer, firstly they found out that China is good for large production, but not so great when you are getting started with just a prototype machine made out of wood and assembled in their backyard. So, they continued to search, and by coincidence, they stumbled upon Claudio in Portugal, who managed to understand their needs immediately and they are working together ever since.

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The Promise of Lightning Network ATM’s

In this post we have a brief overview of what Lightning Network is and how it can and is integrated with existing cryptocurrency ATM’s. We check what are potential advantages and disadvantages of using LN payments for both users and operators.

Lightning Network Overview

There is a lot of information on what Lightning Network is. In short, it is a second layer protocol on top of cryptocurrenices like Bitcoin, Litecoin etc. Effectively, two users have a mutual (multi-signature) transaction on the base layer and then exchange signed new transactions, which are not broadcast to the base layer network and hence are not included into blockchain. Only last transaction in a sequence of exchanged signed transactions (commitment transaction) is broadcast to the blockchain, when one party decides to close the financial relationships with counterparty. Such funding transaction and exchange of signed transaction is called a payment channel.

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Bitcoin ATM Market Dynamics November 2019

In November the price of Bitcoin decreased. The month started with a price of $9,147 and continued to fall approaching the end of the month when it experienced a brief rise. November ended with the price of $7,657 which is a 16.3% decrease compared to the beginning of the month.

The number of new machines continued to grow at a relatively stable rate, unlike the change in price of Bitcoin.

Period Start: 5814, Period End: 6061
Opened: 345, Closed: 98, Net Growth: + 247 (4.2%)

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Bitcoin ATM’s Profits and Cost Breakdown

In this video, you will hear Adam from BC Systems talking about what profits you can expect, as well as the cost options and operating your very own Bitcoin ATM Company.

He divided his presentation into four parts: Location, Cost, Marketing and Fees.

Location

Location is probably the most important part of the planning and operating your Bitcoin ATM Company. Of course, there are different variables when it comes to choosing a location like foot traffic, competition, and potential fees. In his experience shopping malls are the most successful locations for a couple of reasons.

First of all their working hours. They are usually open from 8 A.M. to 9 P.M. and they also tend to work on holidays, so the overall availability of the machines is going to be excellent.

Secondly, shopping malls present a safe place for people. When they go to a public place, where there is a lot of crowd, they feel like they are going somewhere reputable and feel much safer than going to let’s say a liquor store or a smoke shop where there aren’t usually a lot of other people around. This is especially true for guys who are making large transactions, they always want to feel safe and comfortable carrying their money.

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