Two years ago, Zach Harvey and his brother, Josh, were saddled with a failing guitar shop selling vintage and handmade pieces in New Hampshire. On the verge of shutting down the company, the brothers started casting around for a new project to take their minds off the struggling business. Now, they decided to try and solve the problem of buying bitcoin. It was too complicated. They built a prototype of a machine that would dispense bitcoin in exchange for fiat. It was essentially a wooden box filled with components purchased on eBay.
Harvey recalls: “We took it to a libertarian forum in New Hampshire and immediately people were all over the machine. Bitcoin became something that people were interacting with, that they could physically see. It kind of erupted at that point.”
The Harveys have parlayed that prototype into Lamassu Bitcoin Ventures, the bitcoin ATM manufacturer with the largest share of an exploding, and perhaps the most visible, segment of the cryptocurrency economy. While Lamassu may be on top now, its early rival Robocoin and well-funded new entrants are piling into this rapidly changing sector.
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The first bitcoin ATM to be used commercially was a unit by Las Vegas-based manufacturer Robocoin. It was installed in Vancouver’s Waves coffee house at the end of October 2013, lending the place a sci-fi vibe as customers lined up to buy cryptocurrency. A month had barely passed before the news got out that the machine had already grossed more than $1m Canadian dollars, breaking even for its operator after just 17 days. The bitcoin ATM gold-rush had begun.
At the start, ATM manufacturing was dominated by two firms, Robocoin and Lamassu, each with seemingly opposing approaches to the business. Robocoin machines are large, freestanding, machines with built-in palm-scanners. They allow two-way transactions between fiat and bitcoin, with each machine costing about $15,000. Lamassu units are compact, white machines that sit on a table-top. They cost $6,500 each and only allow users to buy bitcoin.
Both pioneers have run into stumbling blocks as their machines left the factory floor to be installed in restaurants, cafes and bars around the world. The Robocoin machine in the Waves coffee house, for example, left dozens of angry customers with unprocessed orders in January as a problem cropped up with Bitstamp, which was the only exchange the machine could use.
Bitcoin Financial News
While bitcoin ATMs have played a crucial role in creating a tangible interface to the ethereal cryptocurrency economy, are they here to stay? Or will they go the way of transitional technologies of the past, joining the Minidisc, Dictaphone and Betamax video cassettes in the graveyard of once cutting-edge tech, as phablets and mobile wallets flourish? Only Time will tell us for sure.
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