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.
Of course, one of the first questions asked was about the security, and Zach said that the first thing you have to be concerned about is the smash-and-grab. That’s when somebody comes in and somehow takes the entire machine with him in less than a minute. It’s usually done with some sort of vehicle. He says that in order to prevent that from happening, you need to make sure that your machine is bolted down right. And, to protect your ATM from vandalizing you would need to install an alarm or external safety cameras.
As for the prevention from double spending, Lamassu offers back end control over confirmed transactions to its users. In other words, the operator can set the amount under which he will not require any confirmation thus taking the risk. Operators are provided with full control in a way that they can set different amounts for different coins.
The most popular cryptocurrency, according to Harvey, is still Bitcoin with a 90% market share followed by Ethereum and Bitcoin Cash.
Lamassu is apparently very happy to provide guidance to new coming operators in terms of giving them advice on different regulations, or connections to proved lawyers, but Zach emphasizes that it is strictly kind advice and definitely not a rule since they are not legal advisers. In that sense, the best advice he gave is that you better have a good lawyer when dealing with AML KYC if you don’t want to go to jail.
Profitability is certainly the most important thing to all operators and on that note, Harvey is assuring us that the market is far from being saturated, and there are definitely places that are completely void of Bitcoin ATMs. He also shared another piece of valuable advice, and that is – the more machines you have the more money you will make.
Building on that advice he explained how you only need to set up one server that could support all your machines so you won’t have extra cost as you add more of them. He also noted that Lamassu software is open source and super easy to use, so operators can just take it, install it and set it up as they want, and most importantly, the software is completely operated by the client. In other words, Lamassu cannot have any control or receive any information about the operator business unless the operator allows it. The operating software is also capable of exporting different kinds of reports that can be used for accounting or statistics.
Lamassu is strong against hosting servers for their clients, even if it may add a layer of complexity. On the other hand, it really adds up on privacy, which is the most important concern to them apparently.
When asked about the main features that set them apart from the competition, the CEO of Lamassu stated that there are three points:
- Design – maybe not the most important, but definitely high on their list, since their thinking is that Bitcoin ATMs need to be inviting and attract more people to use them.
- Software – as mentioned, open-source software fully controlled and customizable by the operator is something other manufacturers don’t offer.
- Zero Fees – according to Harvey, Lamassu is the only manufacturer that doesn’t take a cut of the profit.
Internet is another important part of operating a Bitcoin ATM in a way that if your connection is not stable, and your machines go down often, the customer trust will decrease and the reputation of your machines and locations will go down. Harvey recommends using your own 3G hotspot because Wi-Fi is unstable and cable can be too expensive.
The thing that is making the interviewer uncomfortable is storing people’s personal data on the server. So, when a customer needs to provide its passport or a picture because of AML KYC, the operator is obliged to store that data on his own server which is a big responsibility. Zach replied to that In a confirmational manner, saying that the government is requiring you to spy on your users if you don’t want to go to jail. But he is sure that there should be no problems if the operator is storing the information properly.
Following up on that, he explained how there are different levels of AML KYC depending on the amount. $100,000 request is going to have bigger requirements than the $400 one. For example in Switzerland for amounts under five thousand francs, you don’t need any AML KYC you just need to accept a paper wallet. According to their government that’s the best way to make sure that the person at the machine is the one getting the cryptocurrency. The point is that when it comes to regulation, there is no one answer, and it depends on various factors.
So, according to Zach Harvey, Switzerland is the place to be when you’re into cryptocurrency, make sure you bolt down your machines to prevent them from attacks, the Bitcoin ATM market is far from saturated, the more machines you have the more profitable you are and be sure to connect with a good lawyer because regulations can be pretty complex depending on the jurisdiction. As for the machines, design needs to be appealing and software needs to be highly customizable on one end and super user-friendly on the other.