The first Bitcoin ATM appeared in October 2013 in Vancouver, Canada. The following February, the US got its first crypto ATM in Albuquerque, New Mexico. Fast forward three years to September 2017 and there were a thousand spread all across the world. This week a new milestone was reached, as the total number of Bitcoin ATMs reached 3500, of which an impressive 2594, or 75% of the total, are in North America.
Of course Bitcoin ATMs are a little different from conventional ATMs, chiefly in that they aren’t associated with a bank or financial institution. Instead, the machines are connected to an online exchange which enables users to buy – and in some cases sell – Bitcoin and/or altcoins. On the buying side, users insert cash or card and the new crypto balance is credited either to an existing public key or a new paper wallet which is generated by the machine. Where ATMs also allow the sale of crypto, users send their coins to address specified and, pending confirmation from the network, receive cash from the machine.
The prolonged bear market in crypto doesn’t seem to have impacted on the rate of growth in the crypto ATM network. In May of this year, when there were around 3000 ATMs worldwide, the rate of increase was a little under 6 new machines per day. As we reach this new milestone, the rate of growth has hit nearly 9 new ATMs every day. There seems to be no shortage of demand for the machines even as prices continue to struggle.
Some would argue that the fees charged by crypto ATMs are a significant barrier to their increased usage, however. Typically a premium of 5% is charged on the top of transactions, with the Consumer Financial Protection Bureau reporting fees of up to 7% at some outlets. There are also security requirements, as ATMs are required to meet Anti Money Laundering (AML) and Know Your Customer (KYC) regulations, and users will typically be required to show valid ID in order to use the machines.
