Bitcoin ATM machine, what value does it adds to crypto adoption
As the cryptocurrency community pushes for ways to make cryptocurrency appealing to ordinary people and governments, several methods or mediums for adoption have been introduced in recent years. One such medium is the introduction of Bitcoin ATM machine, with several notable countries approving the system and having them installed for crypto users.
But, does the Bitcoin ATM machines follow crypto standard or aided crypto adoption? Let's take a deep dive into how these Bitcoin ATM machines work and then we will discuss if they are aiding crypto adoption or not.
What is a Bitcoin ATM machine?
According to Investopedia, a Bitcoin ATM machine is a machine that gives customers the ability to buy or sell cryptocurrency using a special ATM card designed for the purpose. It usually comes with a hardware design. As of now, there are over 5850 Bitcoin ATM machines worldwide with the united states of America taking the lead with 87% of the numbers, Canada 7.6%, and the rest spread between Australia and several countries in the world.
The above statistics seem like a nice development for crypto adoption, especially with the recent installation of 1397 new Bitcoin ATM machines across the world in May 2023. But, how well has this impacted crypto and its adoption?
The Bitcoin ATM machine operation
The operation of Bitcoin ATM machines is a direct way of putting cryptocurrency in the hands of intermediaries and the risk that it entails. Using the Bitcoin ATM comes with a very weird and strict KYC. What we see or experience in crypto exchanges concerning KYC could be termed a small thing compared to using a Bitcoin ATM machine.
While you are already exposed physically by using a Bitcoin ATM machine to either sell your crypto for a Fiat cash out or buy some crypto with your card which already has your information. You are required to pass another set of validation with the machine before you are given access to complete your transaction.
According to report, it's required to present a valid driver's license or passport with owner picture on it that matches the face of the person using the machine. The documents are to be physically presented by the user facing the machine camera for recognition and after successful verification of the information, the user is allowed to complete his transaction.
The venerability and danger in the Bitcoin ATM machine system
There are much venerability and risks users of Bitcoin ATM machines are exposed to. Some of them are:
1. Risk of hacking or security breach on the system: It's reported of recent about a security breach on the Bitcoin ATM manufacturer General Bytes resulting in about 56 BTC, and 20.82 ETH stolen. This is a great cause of concern for users as it has put their funds at stake. Also, raises doubts about the reliability of the system and hence is not recommended as a safe option for either buying or selling crypto for Fiat currency.
2. Complete remover of privacy: Even though crypto users and investors have to do KYC in exchanges, there are still levels of privacy when making a transaction of either buying or selling crypto for Fiat. It's an agreement in most or all crypto exchanges not to give users' information to a third party except otherwise in case of litigation.
But, in the case of Bitcoin ATM machines, users' privacy is completely removed. While a user has to pass documents validation at the point of transaction, he is also exposed physically to the whole world because everyone knows what the ATM machines are for. Although this may not look odd, since the government of those places allows the use of Bitcoin ATM machines, it completely undermines the principle and standard of practice in cryptocurrency.
3. Exposure to physical robbery: Using a Bitcoin ATM machine exposes the user to being robbed physically. One may argue that the system is not different from the normal bank ATM machines which may seem logical. But, people do not think of Bitcoin or crypto users the same as they think of bank ATM users.
Bitcoin or crypto users are seen as rich people, at least, that's what online bloggers make the world believe. That cryptocurrency is a means to get rich quickly. The danger of being robbed is high when doing a crypto transaction at a Bitcoin ATM machine point. Some criminal might be hiding at a corner waiting for you to cash out your crypto and then snatch away your money. Some of them may be following you closely in the queue pretending to also want to buy or cash out on their crypto, but are there to know how much Bitcoin you are transacting.
4. Insane transaction fee: Using a Bitcoin ATM machine attract a much higher transaction fee than the normal crypto exchanges charge. This doesn't look to be in favor of most crypto users, and also not in line for aiding the adoption of cryptocurrency in those countries where the Bitcoin ATM machines are installed.
Transaction fee is one of the talking points in the use of crypto and is more reason why the use of crypto is attractive to most people. The Bitcoin ATM machines transaction fee defeated that reason with a cost that is very high.
Conclusion
While the introduction of Bitcoin ATM machines may seem a development in the right direction, in practice it comes with many inherent risks for ordinary crypto users. It could be a good option for big crypto influencers and whales who have nothing to lose.
Even though exchanges have forced the majority of crypto users to lower their holds on anonymity through KYC, anonymity remains something that most OG crypto users don't want to give up, and the Bitcoin ATM machine is an enemy of their want for complete privacy and anonymity.