In this interview, held in August 2019, you will hear Moe Adham from the Canadian Bitcoin powerhouse Bitaccess. He talked about Bitcoin ATM adoption, volume, and how they are at the front line of the Bitcoin industry.
Founding of Bitaccess
To start the interview, Moe talked about how he got interested in crypto somewhere at the beginning of the decade when he was a nanotechnology student in Switzerland. He used his knowledge in FPGA programming to start mining and fell in love with Bitcoin instantly. Shortly after he came back home to Canada so he can dedicate his time to learn as much as he can about Bitcoin, and in 2013 he founded Bitaccess and started manufacturing Bitcoin ATMs.
At that time in Canada, there was only one more company doing the same thing, but they fizzled out at some point. Back then, everybody wanted to buy Bitcoin but was hesitant to take a large amount of cash and go meet someone in person. On the other hand, exchanges were not something that people trusted after what happened with Mt. Gox. So, Moe decided to offer them an alternative. He says that he had a friend who was selling these kiosks designed for people to buy lunches in an office, and they got together, hacked it in 24 hours, and turned it into a Bitcoin ATM. On January 1st, 2014 they launched their first Bitcoin ATM located at Decentral in Toronto.
Bitcoin ATM adoption
As Moe explains things are very different now than they were back in 2014. Back then, when they started, there was about a four year period of just no interest in Bitcoin ATMs. He thinks that it is because at that time the Bitcoin ATM was not much different than a slot machine for most people. People would basically go to buy Bitcoin because they thought it might be worth more at some point. So, the usage of Bitcoin ATMs really correlated to Bitcoin price at those years. It was around the second quarter of 2018 when they noticed that volumes of Bitcoin ATMs de-correlate from the price of Bitcoin and started to experience constant growth. In his words, they built a product that has its own little economy, and it’s no longer just used by people who are trying to speculate on the price.
He briefly talked about the Bitcoin ATM monthly volume, saying that it really depends mostly on the location and the competition, but he says that it is normal for a Bitcoin ATM to have $100.000 worth of transactions a month.
As for the average value per transaction, Moe said that the average buy transaction was around $200 while the average sell transaction was around $500. He, then noticed that there is a small imbalance here, where more people are buying Bitcoin than selling them at ATMs.
Later on, he touched upon the Bitcoin ATM adoption outside the US, saying that it is not really comparable because of the purchasing power of the people outside of the Western World. So most of the revenue is still generated in advanced economies that are the US and Canada.
Are Bitcoin ATMs franchised out?
Different from fiat ATMs where the bank serves as a central regulator, Bitcoin ATMs are less centralized. The operator will buy their product and software and deploy it in their jurisdiction. You also have sub operators and ones that work in multiple countries. So, it really isn’t a franchise model because the manufacturer just sells the product and the rest is on the operator. Having that in mind, Moe also pointed out that the biggest challenge for any operator is compliance.
How much does the bull market affect the Bitcoin ATM transactions?
As mentioned earlier, Moe explains that it used to be that the bull market drove a lot of the volume on the Bitcoin ATMs, but now it doesn’t seem to have a measurable impact compared to what the growth curve was before. When we look at the chart of Bitcoin ATM volume from the end of 2018 to the end of 2019 you can see that there were periods where the price was not really moving too much, but the Bitcoin ATM volume maintained a steady growth. This gives a pretty positive outlook for the Bitcoin ATM industry.
How to use a Bitcoin ATM?
First of all, Moe pointed out the existence of two way ATMs. Whether you want to buy or sell you must start with mandatory registration. So you show up at the ATM, enter your phone number and you will receive a text message. This is a kind of account creation, but in most jurisdictions, it will not be enough, and you will be asked to show your ID and verify your identity. After that, you will receive another text message saying that your account is created and you will be able to trade your Bitcoin. The good thing is that you will have to go through the registration process only once.
If you want to buy Bitcoin, you just start putting cash in the machine and scan a QR code after which the Bitcoins will be delivered directly to your wallet.
If you want to sell, the ATM will show you a QR code and you can send Bitcoin from your wallet. Then you will have to wait for the confirmation, which means that you will receive a text message when your money is ready for you to pick it up at the ATM. If you don’t feel like waiting you can actually go to a website, sell your bitcoin online and then go and collect your cash ten minutes later.
Bitcoin ATMs, the front line of the industry
Moe also emphasizes that Bitcoin ATMs are not shown as much respect as they deserve, for being the most common way that people are introduced to Bitcoin. The main reason is that people like something that they can touch and they will more often place their trust in a device that is located in a shop that they are visiting for years. So, being at the front line of the industry their job is to create the best possible experience for first-time users, and make it as simple as possible. Because if your first time experience with the Bitcoin ATM is a bad one, the chances of you staying in the ecosystem are pretty low.
Hearing what Moe from Bitaccess talked about, we can notice that Bitcoin ATM volume does not correlate to the Bitcoin price since the beginning of 2018. On the other hand, the adoption in certain countries is still pretty related to the state of their economies. When it comes to the types of transactions, there are more people buying Bitcoin than selling them on ATMs. And, of course, the Bitcoin ATMs are the most important tool for introducing new people into the crypto world.