Will ATMs Fuel Mainstream Bitcoin Adoption?
Most Americans are familiar with how an ATM works. Just like brushing one’s teeth, they can now be used with little conscious thought. A card is inserted into a machine, a pin number entered, and a desired transaction mode is selected. Situated in myriad public locations, these machines have become the essence of banking convenience. Their mere presence symbolizes the fact that cash is still a highly recognized form of monetary exchange.
Bitcoin Follows In Cash’s Footsteps
Today we are seeing the emergence of bitcoin ATMs in public locations throughout the world. According to CoinATM Radar, there are nearly 600 bitcoin ATMs currently installed worldwide. 62% are housed in North America, 25% in Europe and 7% in Asia. Users are able to buy and/or sell bitcoin through the convenience of these machines. And as is the case with traditional ATMs, fees may be involved.
The proliferation of these ATMs has been widely touted as a way for consumers to better understand bitcoin’s properties as a form of currency. The ATM is a concept that people understand- We know what a deposit and a withdrawal are as well as the basic concept of an account. This allows one to make a logical connection between bitcoin and cash, and it can help allay a common concern among bitcoin neophytes: In what way is bitcoin real and tangible?
The fact that bitcoin ATMs are still a bit of a novelty is actually good news, because their mere presence tends to attract a bit of curiosity among the uninformed. People are often naturally drawn to them, wanting to know what they’re all about. This as I see it is lighter fluid for boosting mainstream consumer interest.
Here at Coinstructive, we have partnered with CoinOutlet to install the first 2-way bitcoin ATM in San Diego County California. We see this launch as just one small step in fueling a long-term push toward wider bitcoin adoption.
Potential Network Effects?
Network Effects are where the value of goods and services are largely predicated on growth in the number of people using them. In many respects, the entire bitcoin ecosystem reflects this pattern, with bitcoin ATMs representing just one potential node. As more people use bitcoin and feel comfortable with it through the conveniences these machines offer, the more popular it will become in terms of everyday use and merchant adoption.
Room For Improvement
As the proliferation of bitcoin ATM locations continues worldwide, new questions are surfacing about their user friendliness. Many in fact have given mixed reviews in terms of their navigational ease. As interest in these machines grows, tools to educate and provide hand-holding to users just-in-time will grow in importance.
In an August 2015 talk that he gave for Harvard University’s iLab project, Andreas Antonopoulos, Bitcoin thought expert and author of “Mastering Bitcoin”, notes that bitcoin ATMs technically have nothing in common with traditional ATMs. He suggests that Bitcoin ATMs could carve out a significant network advantage by infusing some creative solutions into their model.
Dovetailing off of this theme, here are a few things I believe could jump start bitcoin’s network effect:
Support: Live voice or text chat 24/7 features at each machine to provide immediate reassurance with consumer issues or complaints.
Instructional Tutorial: Voice or video-assisted instructional directions on how to use the machine
Cross Marketing: Side of machine advertising and promotional opportunities for bitcoin retailers, wallet providers, and other related digital projects.
Versatility: In addition to bitcoin, machines should provide other send and receive options for fiat currency as well as a limited currency exchange. And integrating options like Shapeshift.io which allows one the ability to toggle back and forth between myriad digital currencies would be valuable.
Locales: Collaborative opportunities to place machines in locations that offer high levels of foot traffic should be encouraged. Airports appear to be particularly ripe for this sort of opportunity.
Engagement: Creative contests that encourage bitcoin ATM use hold great promise (i.e First time user of the ATM receive a $5.00 BTC rebate).
All evidence suggest that the bitcoin movement is on the cusp of something big. Here at Coinstructive, we support the use of bitcoin ATMs as just one element to ignite exponential growth within the vast bitcoin ecosystem. These machines hold great promise for the future of digital currency transactions.
Michael Scott is a journalist specializing in emerging digital economy trends and CoinStructive’s resident blogger.