Bitcoin ATMs have been present in the cryptocurrency ecosystem since 2013 but have historically been overshadowed by online exchanges and never became ubiquitous. However, that has changed recently with an increasing number of Bitcoin ATMs emerging across the U.S. and other countries as viable alternatives to the problems with online cryptocurrency exchanges.
According to a report published in August earlier this year, Bitcoin ATMs are expected to experience significant growth through 2023. The crypto ATM market is projected to grow from its current level of $16.3 million in 2018 to $144.5 million by 2023, representing a CAGR of 54.7 percent from 2018 to 2023.
At the forefront of this growth is Bitcoin Depot, one of the leading cryptocurrency ATMs in the U.S. with over 150 ATM locations and a unique offering of two-way exchanging for multiple cryptocurrencies.
Problems With Current Methods of Purchasing Cryptocurrencies
Despite the popularity of online U.S. cryptocurrency exchanges such as Coinbase and Gemini, there are some legitimate hurdles that they impose on many cryptocurrency users. Users need to go through complicated and time-consuming KYC/AML processes, bank accounts are necessary to link to the exchange, and processing times for buying and selling cryptocurrencies can take days.
KYC/AML procedures among online exchanges have become problematic and unfavorable among many cryptocurrency users. Delays in KYC procedures took some popular exchanges — like Coinbase and Poloniex — months to verify new users. Kraken — the well-known U.S. exchange — suspended new user registrations at the height of the ICO boom towards the end of 2017. Cryptocurrency users are also concerned with the stringent KYC procedures that almost all U.S. exchanges are adopting. This is largely viewed as a departure from the pseudo-anonymity provided by cryptocurrencies in the first place.
Another problem stemming from the use of online exchanges is the requirement of having a verified bank account linked to the exchange. Several of the most established exchanges only allow for major U.S. banks to be used with the exchange, completely blocking a substantial portion of potential users from participating. Further, verification of bank accounts can take days and often lead to problems such as suspicious activity or red flags being raised by the user’s bank throughout the process. JP Morgan and Bank of America even banned credit cards from being used to purchase cryptocurrencies earlier this year.
One of the more consistent issues with using online exchanges across the industry is the delays associated with depositing and withdrawing both fiat and cryptocurrencies. Gemini takes several business days to fully clear fiat deposits through verified bank accounts, and direct withdrawals from exchanges to verified bank accounts can sometimes take up to 5 business days.
Advantages of Bitcoin Depot
Bitcoin ATMs provide a refreshing alternative to many users who do not want to go through the hassle of using online cryptocurrency exchanges. Bitcoin Depot — a leading Bitcoin ATM platform in the U.S. — offers several advantages over both online cryptocurrency exchanges and other Bitcoin ATM services.
Bitcoin Depot ATMs are located across the U.S. in locations such as convenience stores, supermarkets, and shopping centers. Their ATMs offer instant verification, and users can create accounts that are verified in minutes, a massive leg up on online exchanges. Transactions are also processed instantly by the ATM and users can exchange cash directly for four different cryptocurrencies including:
- Bitcoin Cash
Bitcoin Depot ATMs are also non-custodial, meaning that they never take ownership of your cryptocurrencies, a feature that is not prevalent among online cryptocurrency exchanges which present a security risk for them.
Bitcoin Depot ATMs are two-way ATMs, a trend that the earlier report highlighted as the type of ATMs with the most growth potential over the next few years. Users can exchange cash for any of the above cryptocurrencies and vice-versa — exchanging cryptocurrencies for cash directly at the ATM. Many other cryptocurrency ATMs also only offer Bitcoin and not other established cryptocurrencies like Litecoin and Ether, opening Bitcoin Depot ATMs to a broader cryptocurrency community.
Buying and selling cryptocurrency locally with cash is not only a major convenience for its ease of use, but it also bypasses the complex bank verification and KYC measures required by online exchanges. This opens up access to cryptocurrencies to a vastly larger audience, particularly in local communities where many people are unfamiliar with what they are.
Avenues for purchasing cryptocurrencies with cash are skim, LocalBitcoins is one of the few alternatives but requires users to meet with unknown parties in public areas to purchase crypto directly in cash. Other Bitcoin ATMs do not offer multiple cryptocurrencies like Bitcoin Depot, and some have delayed verification and payment times. Bitcoin Depot is an impressive option for users of both online exchanges and other ATM services that do not provide all of the advantages that Bitcoin Depot offers.
Cryptocurrency ATMs are quickly blossoming into a viable avenue to buy multiple cryptocurrencies directly with cash locally and instantly. A substantial advantage over online exchanges, Bitcoin ATM services like Bitcoin Depot are poised to lead the way in the optimistically expected growth rate for the field.