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BTMs allow Bitcoin to reach new markets and new users who are skeptical of online-only transactions.
BTMS, or Bitcoin ATMs, allow for an alternative to using either online exchanges or in-person transactions when buying or selling Bitcoin, replicating the process of using ATMs used in traditional banking. This makes them suitable for bringing Bitcoin to new users.
Luca Dordolo, the operator of the first BTM in Italy, sees them as an opportunity to get overlooked demographics to start using Bitcoin.
“BTM is a perfect instrument to spread Bitcoins in new areas, especially where Bitcoin is almost unknown. BTM can be the perfect testimonial for this new global currency.”
According to Dordolo, people have an attachment to physical contact with valuables, a connection that is lost with Bitcoin use. BTMs allow for familiar physical contact in Bitcoin transactions, which makes many new customers feel safer.
“The fact is that people who uses BTM doesn't care to buy bitcoins online. I think they basically don't trust on online methods so they prefer the old way with Bitcoin ATM[s].”
Dordolo observed people from all ages and walks of life becoming BTM customers, even those in their seventies and laborers still in their dirty work clothes.
“I thought bitcoin was for nerds or at max for financial business guys, not for the workers or for farmers, but BTM is popular. It is really for every social level.”
Deploying BTMs has brought Bitcoin to strange new demographics. BTM manufacturer Lamassu has even translated their user interface into Friulian, a language spoken by approximately 300,000 in northeastern Italy.
Dordolo notes that the process of withdrawing from a BTM is an entirely less complicated process than using an online exchange.
“...you enter in the office where it [the BTM] is placed, you scan your QR code/address wallet, put the notes in the machine, and in less than 30 seconds you are out on the public street without exposing [sic] anyway of data on your identity or why you are buying Bitcoins.”
Zach Harvey, co-founder and CEO of Lamassu, points out the two main advantages of using BTMs: efficiency and security.
“When using a BTM, the operator (the proprietor of the machine and provider of services) holds the cash for 4 seconds alone. That is the time it takes the bill acceptor to validate your banknote and send you bitcoins. Compare that with days for wiring funds into your exchange and waiting for them to clear... BTM operators never hold users coins and there is no central server to hack or shut down.”
In October of 2013, Canadian Bitcoin exchange Bitcoiniacs partnered with Las Vegas startup Robocoin to debut the first Bitcoin ATM in Vancouver. Now, according to Coin ATM Radar, there are over 500 BTMs in operation. Most of these are heavily concentrated in North America and Western Europe. Dordolo: “Because USA and Europe are the most computerized parts of the world.”
Dordolo says that BTMs usually end up located in high-traffic areas such as shopping malls, train stations, and airports.
“If we talk about usual places I can add bars, pubs, coffee shops or even travel agencies or electronics shops.”
According to Neal Conner, Customer Service Manager for Lamassu, there are exceptions to this general rule.
“One of the most unexpected BTM locations was a trendy women's clothing boutique. While it didn't match the stereotypical bitcoin demographic at the time, it proved quite popular, and brought in new customers discovering their store.
Beyond technological development of a given area, another significant hurdle to the expansion of the BTM market is navigating regulation from local governments, though Dordolo thinks these limitations tend to affect Bitcoin in general.
“China… limited bitcoin use since december 2013. Even in India there are some problems between government and Bitcoin, even if not official.”
Dordolo thinks BTMs are here to stay, and doesn’t see them fading into the background as more consumers become educated and fluent in online-only approaches to Bitcoin.
“There will be forever people that prefer buying their bitcoins at a safer BTM than from an unknown exchanger platform or a bitcoin dealer.”
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