The ATM can be considered a staple of traditional finance, even those in most developing countries have used one at some point or another. Scattered across the world are these hard-line connections between people and their bank accounts.
With the introduction of cryptocurrency came many things, including the bitcoin ATM, but is it a hybrid of the old and new world or just a familiar idea that in the end will be a quirk in the history of bitcoin that slowly dies out.
The bitcoin ATM always seemed to pride itself on being a tool of convenience and a link between cryptocurrency and something we already knew. The problem is that while convenience does indeed merit extra expense, this is something that requires a reasonable trade-off to make sense.
Searching online for a map of bitcoin ATM locations, heading over to the nearest one, and buying bitcoin doesn’t sound so bad at first thought. However, once you consider the excessive fee structure typical of bitcoin ATMs, you have to put a price on that effort.
For a while, you could factor in the lack of KYC & verification required to use a bitcoin ATM. This flexibility allowed you to buy your way in and out of the cryptocurrency markets without dealing with excessive verification or the risk of supplying your ID to companies existing in a new market that often derived some degree of chaos from the regulatory uncertainty of the times.
If you look at the rates of bitcoin ATM installations, it would be easy to assume they are a growing success, but the picture isn’t as straightforward as it seems. For many years suppliers of bitcoin and even just more general cryptocurrency ATMs were significantly limited, leaving the demand unable to be met by the supply of these devices.
With the increased numbers of devices rolling out, this has likely started to alleviate in recent years as most problems of this nature do when the demand is there.
I’d argue that this constant current growth in installations is merely an echo of this restricted supply’s dynamics being improved. As the ability to produce these devices becomes more mainstream (even in a niche context), the rate at which they can be sold and rapidly installed increases at a rate that looks like a success, but is it the parabolic pipe dream it seems? At least in my opinion, nope.
Unlike many technologies that are replaced or superseded with something new, the bitcoin ATM will likely drown in an idea that predates it. In June 2012, the launch of LocalBitcoins brought P2P (peer-to-peer) trading into the homes of cryptocurrency traders worldwide, providing the flexibility and convenience that the bitcoin ATM later attempted to offer.
While it was only the next year that the first publicly known bitcoin ATM was installed in Vancouver, maybe it was a misstep from the start after all.
Cash is often regarded as a way to deal with traditional finance while reducing your exposure to third-party involvement by banks. There’s something slightly soothing about having a little cash in your sock drawer for emergencies or just the mere ability to know exactly how much money you have on hand.
The cash economy is one that seems to be changing but is unlikely to go away quietly. The ability to convert cash to bitcoin or quickly get bitcoin for cash appears to paint the bitcoin ATM positively.
Still, the increase in restrictions for using bitcoin ATMs in many countries, as well as significant fees that are often hidden in the price spread on these devices, takes the shine off this benefit quickly upon doing the math.
It’s no surprise people commonly seek to exchange their cash for bitcoin with the often aggressive approach banks have taken towards those that trade cryptocurrency.
Over the years, there have been countless complaints from those in the cryptocurrency community across the world of blocked exchange deposits and account closures with murky, at best excuses.
While once LocalBitcoins was the best way to solve this problem and have more control over your trades and your financial privacy, the sudden removal of cash trades and increasing restrictions, in my opinion, have stifled this once great tool.
While the most well-established P2P exchange may have struggled to evolve in this way. (my recommendation: LocalCoinSwap). It has taken up the torch and has stepped up to provide P2P trading to not just those suffering from restricted access to documentation, banking, and financial infrastructure in general, but to those of us who just want to trade with a degree of freedom or privacy.
When bitcoin ATMs first started to appear in metropolitan areas across the world, this was a thing that had many people in the space excited, this sign of adoption brought hope to those already waiting inside the industry.
Whether you were involved in a cryptocurrency business, in trading, or are just interested in this technology’s speculative potential, the existence of this device and it’s strange attempt to combine two clashing worlds sparked hope and intrigue among many of us.
In practice though, it seems they stumbled long before they ran as the novelty has worn thin, and they became perhaps what they always were, an awkward idea that seemed logical at first glance but merely wasn’t adept at adjusting to the changes in the world around it.
While cryptocurrency is seemingly here to stay, the bitcoin ATM may not endure the winds of change in the same way.
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