By Michael Scott
In the prevailing world of fiat currency, ATMs have long proven their worth in cash dispensing and deposit acceptance. Now with the emergence of bitcoin as a viable form of monetary exchange, growing numbers of Bitcoin ATM machines are finding their way to coffeehouses, shopping malls, street kiosks and other public locations worldwide.
Supporters of this emerging development see it as critical to synergizing paper and digital cash — a move pivotal to Bitcoin’s expanded use and mainstream adoption worldwide.
So what is the growth trajectory of Bitcoin ATMs? According to CoinATMRadar, an online site that charts machine locations, over 800 of these ATMs are now functioning worldwide.
Latest statistics show that the greatest volume of machines are in the U.S. (approximately 517 at last count). Here is a comprehensive look at this rapidly expanding landscape by country.
The genesis of this movement dates back to October 29, 2013 when the world’s first publicly available Bitcoin machine went live in a coffeehouse in Vancouver, Canada. Later in 2013, The D Casino in Las Vegas became the first in its industry to house a Bitcoin ATM. Since that time, these machines have expanded considerably in their features and functionality, attracting a growing worldwide audience.
A Rapidly Expanding Market
Texas-based Coinsource, one of a growing number of companies in the Bitcoin ATM space, offers users a simple way to buy or sell bitcoins for cash through their machines. Founded in 2016 and touted as the largest Bitcoin ATM network in the U.S., the company’s mission is simple: Provide customer support at a level where the purchase or sale of bitcoins is as simple as withdrawing or depositing fiat from a traditional ATM.
Coinsource’s strategic efforts emphasize the placement of machines in high pedestrian-traffic locales with convenient consumer access. With 2016 coming to a close, over 70 machines are now operational across the states of Texas, Nevada, California, New York, New Jersey, Pennsylvania and Louisiana.
The behemoth state of Texas is the latest to see a significant expansion with eleven new machines scheduled to go live in December 2016. With this move The Lone Star State now has the distinction of being the fastest- growing market for Coinsource ATMs, possessing the third highest concentration of machines per state behind California and New York. This includes Texas’ first two-way machine, allowing customers to both buy and sell bitcoins directly from a machine without having to access an exchange.
And on the heels of the major push into the Lone Star State, it was just announced that Coinsource has expanded into Tennessee, installing the first-ever Bitcoin ATM machine in Memphis and two more in Nashville.
Says Coinsource cofounder and CEO Sheffield Clark: “We are adding more and more ink spots to the map and there are no signs of slowing down. In fact, it has been difficult to meet such intense demand but we are scaling as best we can. We’ve implemented the right procedures, we’ve focused attention on compliance and convenience, and we’ve hired the right staff to keep servicing an exponentially growing customer base.”
Clark says that a substantial expansion in Texas was targeted because Coinsource saw it as a high growth market. “Texas' economic engine is like no other state in the U.S. and we saw big cities like Dallas and Houston as a hub for rapid Bitcoin adoption. Seeing Bitcoin succeed here and helping it grow is an obvious step for us. Texas has always taken a very pro-Bitcoin stance and has been supporting industries that help drive the local economy.”
Despite the rapid global expansion of these machines, Clark doesn’t view this as an affront to the prevailing banking industry. “No, I actually don't see it as a threat. I believe we need to live in a world where fiat and cryptocurrency both exist. In a day when technology is becoming more pervasive and people are desiring more choice, we need to have a collaborative ecosystem in place to meet the daily requirements of as many people as possible.” He’s quick to point to Coinsource’s role in assisting those wh0 are underserved by traditional banking standards and find it difficult to get an account or credit cards established. “We don’t see this as a competitive threat, but as a convenient alternative,” notes Clark.
In terms of challenges encountered when Coinsource enters a new geographic market, Clark notes that regulations vary from state to state. “We invest a substantial amount of resources and due diligence into researching each state's local walls and determining what sort of licensing is required, if any, before we enter a new market. Compliance is one of our main priorities, and we are federally regulated by FinCEN.”
Heading into the new year, Clark sees demand for Bitcoin ATM access points increasing alongside the growing value and trading volume of the digital currency itself. Coinsource, he says, has also seen an increased demand for (bitcoin) sell functionality at the kiosk, which is why the company is aiming to install more two-way machines. Finally, he’s hearing talk in the Bitcoin community about how growing numbers of people are migrating away from exchanges and toward Bitcoin ATMs due to the almost immediate transaction time for buying and selling bitcoins at the machine.
Concludes Clark: “The plan for 2017 is continual growth throughout the country. We are receiving many requests from communities to install machines in new locations and are working tirelessly to meet demand. Our aim was to have 70 machines operating across the U.S. by the end of 2016. We also will also be looking more closely at a possible expansion outside the U.S. Frankly, all of this is happening far quicker than we expected.”