International money transfer market – best fit for Bitcoin
Remittance market is a huge transfer of money happening every day. According to World Bank report the estimated remittances size in 2015 was forecast to be $601 billion. International transfers were one of the best-fitting envisioned applications of bitcoin, as it is state border-less by definition and cheap to send money irrespective of amounts sent, while only fees per transaction size in bytes matter. However, it is still a hard way to get Bitcoin adapted at a massive scale. Early stage of its development makes it an instrument for tech advanced people only.
With introduction of new bitcoin services we are moving closer to the case when bitcoin is used daily by many households, bitcoin ATM is one of such services. Initial idea of bitcoin machines is to exchange cash to bitcoins or other cyrptocurrencies and vice versa, bitcoin to cash. However, there are other use-cases for bitcoin ATMs evolved. One of them is international remittance.
Bitcoin ATMs are spreading quite fast since the end of 2015 and beginning of 2016. Although the most useful application of bitcoin machines could be in the developing countries where financial inclusion is low, the majority of bitcoin ATMs are still appearing in developed countries.
Quick look at bitcoin ATM aggregated stats shows that 63% of all bitcoin machines are in North America and 25% are in Europe. Taking into account 5% in Oceania (mostly Australia) means almost 95% of all machines are in developed countries. There are several reasons for this. Costs for bitcoin ATMs might be quite high for average businessmen in developing country with respect to risk of operating and running it. Also return on investment required can be achieved only in locations with relatively large user base and steady bitcoin usage (mostly in developed countries as of now), which results in transaction volume for such machines.
Leading country within the developed countries list with respect to bitcoin ATM adoption is the United States. As of the end of March 2016 it has roughly 280 bitcoin ATMs installed across the country, which comprises ~45% of all installations worldwide.
It’s been two years since the first bitcoin ATM went live in Vancouver, Canada on 29th October 2013. So what has been achieved over this time and what are the current dynamics of this newly evolving market?
As it is seen on the following chart number of bitcoin ATMs is steadily increasing. However, the speed is lower compared to the first year. During the first year there were 284 bitcoin ATMs installed and in the second year only 187 new bitcoin ATM locations were added and not removed later. This is lower than we forecasted a year ago based on the growth rate of traditional bank ATMs in the beginning of 70-s. It was calculated that there will be about 562 bitcoin ATMs installed by this time, however, there are only 471 in the world.
Sometimes it is hard to find a good location for a bitcoin ATM, but at the same time there are places where demand is high enough to put several machines at the same location or close to each other. It might be dictated by high competition in the region among the operators or simply pure high demand for buy / sell bitcoin services.
In this post we look at the list of top 6 bitcoin ATM cities and check who are the top operators in the areas and what is the mostly used type of bitcoin ATMs.
#6 Chicago, USA – 12 bitcoin ATMs
Chicago opens our list of top bitcoin ATM cities at position #6 with 12 installations. 7 machines are manufacturer by Genesis Coin, who is a leading supplier of bitcoin machines in this area. Speaking about operators, half of all installations belong to Red Leaf Chicago, who is the leading provider of bitcoin ATM services in Chicago area.
Bitcoin ATMs appeared first in 2013 and since then increased their presence in many countries around the world. At the moment there are 341 bitcoin ATM installed according to our bitcoin machines map.
Bitcoin ATM is one of the fastest ways to get into bitcoins and sell bitcoins for cash in case it supports two-way operations. But in parallel there are many more physical locations, where you can buy bitcoins for cash or sometimes sell. Those services are usually based on the existing infrastructure be it ATMs network, stores chain or agent offices. Here is a list of such services, usually every of them is targeting some geographical local market. Continue reading →
Recently we’ve added a new page on the site called Charts where we collect all the metrics about the Bitcoin ATM industry. The advantage of this statistics is that it is online and shows always up-to-date state of the Bitcoin ATM industry. In combination with the information about Bitcoin ATM installations per manufacturers, it gives a very solid base for understanding how we progress.
We gathered a lot of information about the Bitcoin ATMs for our Bitcoin ATM Map thanks to many contributors. Now it is time to pay back to the community. For many Bitcoin machines information about the fees was stored. However, it was the information that operators usually don’t want to share. Recently we added integration of API from many providers which allowed us to show online rates for many Bitcoin ATMs. Using the data from both sources, it became possible to answer the question “How much do the Bitcoin ATM operators actually charge their customers?”
For detection of the fees for every machine we used the following algorithm (in descending priority order):
If the data about online rates for two-way machine is available – calculate the fees based on the spread (buy and sell fees are averaged in this case);
If the data about online rates of one-way machine is available – calculate the fees based on BitcoinAverage feed in corresponding currency;
Finally, if there is no online rates information, but the data about fees was collected before – we use it.
Based on this logic we collected data on 127 Bitcoin ATMs out of total 230 machines (55%). While information about the fees was collected not only from the providers, but also from independent sources like reddit and bitcointalk, it is likely that the data is not biased and may be assumed as a representative sample.