“Bitcoin-ATM” – that might sound alien at first. How can someone withdraw a virtual currency from an ATM?
But it doesn’t work that way. It’s exactly the other way around.
Instead of withdrawing cash from a bank account, users have to insert cash into the ATM to convert it into cryptos. The coins will then be sent to their digital wallets.
The crypto coins should arrive in the user’s wallet within one to five minutes. If the network is overloaded, it might take up to 30 minutes.
Equipping Liechtenstein with Bitcoin-ATMs
The very first Cryptomat in Liechtenstein was installed in early 2017 in the Hoi Shop in Vaduz. The demand was so high that the shop was overwhelmed by the crowds. The ATM was closed by the end of the year.
Georg Bühler and Maksymilian Mencel saw what happened and drew the conclusion that there is a market for Cryptomats in Liechtenstein.
That’s when BitcoinATM.li was born. The vision is to equip Liechtenstein with a network of Bitcoin-ATMs.
Bühler explains, “Due to their complexity, cryptocurrencies such as Bitcoin are a mystery to many people in our society. We believe there is a need for secure and easy-to-understand access to the world of cryptocurrencies.”
The third will follow within the next three months. Its location is still unknown.
Skepticism and regulatory hurdles have slowed down the progress
BitcoinATM.li’s plan was to launch at least five ATMs by the end of 2018. But progress was slower than expected.
It’s not easy to find a location for BitcoinATMs, because business owners are concerned about having an automate on their premises, explains Maksymilian Mencel.
While Liechtenstein’s businesses and the government are increasingly focusing on blockchain technology, the general population remains skeptical towards cryptocurrencies. Also, there are not many places in Liechtenstein where you can pay with digital money.
Regulations are not clear either. In the past, other ATM owners had to shut down their machines, because they didn’t have the required licenses.
Mencel and Bühler are confident that they won’t face these issues. They say they have done their research, obtained all required licenses and are well-connected with Liechtenstein’s shop-owners.
Bitcoin-ATMs could accelerate crypto-adoption
The number of Cryptomats around the world has doubled in 2018 and now stands at just over 4,000. About 20% of those machines are in Europe, mostly in UK, Austria, Russia and Czech Republic.
Lamassu, a Cryptomat-manufacturer, has just moved its headquarters to Switzerland. It’s likely that the company will roll out more machines in Switzerland, and potentially also in Liechtenstein.
Bitcoin-ATMs could support the proliferation of cryptocurrencies. They make digital money easily accessible for the general population. However, they will only be useful if businesses also start offering crypto payment options.
It’s a chicken and egg situation. Do we need the ATMs first, so it’s easy for consumers to access cryptos, which in turn will motivate businesses to offer crypto payment options?
Or do business first need to offer crypto-payment options, which will result in more people using crypto-ATMs?
It would be best, if both happened at the same time. BitcoinATM.li will go ahead anyway and launch its third ATM.