Bitcoin Forum

Any idea why the concept of crypto ATMs failed ? It failed to become big ? Is it because of strict goverment regulations  ?

I think the number one reason is strict government regulation. Aside from that, there are already so many online wallets and exchanges where you can buy and sell Bitcoin, which in a way makes Bitcoin ATMs feel less essential. Even regular cash ATMs aren’t used as much anymore since most transactions are now online... it's faster and saves on fees.

So, Bitcoin ATMs seem more like a way to showcase that Bitcoin exists rather than being a necessity. In reality, Bitcoin transactions can be easily done online, and since Bitcoin is already widely known, these ATMs have become less important.

i do not know if i would say crypto atms have failed when it has not properly launched off yet

there are not many crypto atms yet as far as i know and i do not hear that those existing ones have failed already
there is not much crypto atms that are in existence right now like i said so i do not think there is a good number of sample that we can analyze in terms of success

but i am guessing why there is not much crypto atms is because there is not much companies yet willing to make ones

Nope. I don't think that the biggest reason why it flopped due to government regulations. But the very reason why is about its fee. The ridiculous fees that it charges to its customer is crazy. That's why even it is a good type of potential business model, those that are currently existing are given reviews of how they are charging a lot for conversion. So, I think this is the next problem that's needed to be solved by the manufacturers of it or the providers that are being used for it. Once the fees become justifiable, I think that the customers are going to patronize the usage of it.

Years ago when Bitcoin adoption was smaller than now, and there was less options to cash out or to purchase bitcoin, Bitcoin ATMs are one of most favorite choices.

Recent years, there are fast and big changes in regulations including KYC and AML which affect Bitcoin ATM operations. From no KYC to KYC, Bitcoin ATMs are no longer attractive with many people.

There is one more reason that is aso big disadvantage of Bitcoin ATMs is very expensive fee. Nobody want to pay expensive fees especially if they can access many other methods that have much cheaper fees.

Fees are from 4% to 25% (https://www.investopedia.com/terms/b/bitcoin-atm.asp), which are too expensive.
Bitcoin ATM Deposit Exchange Rate shocks (https://bitcointalk.org/index.php?topic=5441922.0)

I haven't used any Bitcoin ATM yet but I won't say that the reason for there being a Bitcoin ATM is to show that Bitcoin exist.
Bitcoin transactions always requires you to carry it out on a device, so imagine if you aren't with any device and you must have to perform an important transaction that is where the Bitcoin ATM comes in.

Although it's not very critical to have a Bitcoin ATM but it will be an added advantage to the crypto-currency community if there can be more Bitcoin ATMs around the world.

I have a notion that Bitcoin or crypto ATM is still not in demand by many people, and this is based on what happened in my country. I have a thought that the competitiveness of the ATM is still lacking compared to the exchange function provided by the exchange, which at this time p2p exchange is still much more in demand by users, especially in Indonesia, besides that the ATM also seems more complicated than doing p2p exchange and then making fiat withdrawals at local bank agents which is simpler. And maybe this is due to the limited number of Bitcoin or Crypto ATMs in Indonesia, and if the number is greater, there is a possibility that it will be used more or even make people accustomed to using it. For the regulation, I think in my country it is still allowed and there is no prohibition from the government here.

How did you come to the conclusion that it failed? According to data from coinatmradar (https://coinatmradar.com/), there are currently just under 38 000 crypto ATMs in the world, located in 69 different countries. The only problem may be that over 33 000 of these devices are located in North America, meaning the rest of the world is far behind.

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You are living in a big delusion, maybe you should open your eyes and learn how to use search engines? Making conclusions based on what you see exclusively in your environment is completely wrong if we are talking about what is happening on a global level.

Bitcoin ATMs have not failed, but they need to fail if they don't stop using it to exploit customers. Maybe it's not popular in your area, which could be the reason why you thought it had failed, but the reason why I said it needs to fail is because of its ridiculous fee.

I mean, they charge higher than what Bitcoin currently sells for in the market, which anyone who knows their way around other means of buying won't want, but I use that option. People who make use of Bitcoin exchanges are those who are not ready to pass through exchange stress and consider Bitcoin ATMs as a fast means.

The concept has not failed completely (at least some people still use it) but rather it only failed to go mainstream and the reason why it has not gone mainstream is because the service fee is extremely crazy. One of the Bitcoin ATM operators such as coinflip has an extremely crazy fee charge that is 4.9% to 21.9% of any amount that you want to transact on the machine. Some other operators charge 5% to 15% of what ever total amount you want to transact. For example when you want to perform a transaction of 0.1 BTC and you are charged 21% fee from your total amount, the fee would be 0.021 BTC (equivalent of $1, 740 with current rate) meanwhile without this ATM, you can still carry out that same transaction with fee that is not more than $5.

The government policy is not the actual reason why is has not gone mainstream, I believe the major challenge is in the fees and customer's security. If any company wants to launch the Bitcoin ATM, what they likely might be required to do it register with Financial crimes enforcement network and comply with their country anti-money laundering agency and also the taxation they will pay for operation.

While exploring the forum, I have come across two users of Bitcoin ATM and they didn't fail to complain that the fee on those ATM are extremely too high.

Finally used a bitcoin ATM successfully! (https://bitcointalk.org/index.php?topic=5262424.msg54802838#msg54802838)
Bitcoin ATM Deposit Exchange Rate shocks (https://bitcointalk.org/index.php?topic=5441922.msg61845469#msg61845469)

I don't think the idea of "crypto" ATM is a viable one at all because almost everyone who buys altcoins is doing it short term to ride their pump and dump. They do it on KYC'ed CEXes so they don't really care about the privacy and stuff like that so they'd rather buy those shitcoins on a CEX than from an ATM.

As for bitcoin ATMs, I don't think they were ever supposed to become big. They offer an alternative way for people who seek a slightly better level of privacy or to just buy bitcoin that way. As you've observed the regulations have hit them as well. After all these things are issued by a centralized company that similar to a CEX can be forced to obey the surveillance laws! Some operators require identification so that little utility they offered (for improved anonymity) went away very quickly.

So obviously their growth which was already slow became even slower. I still wouldn't say they've failed though. As it was mentioned above there are still quite a lot of them around.

A lot of reasons why many have not been considering for the use of the bitcoin ATM again and base on my little research, here are the few reasons i see could be the cause to this steady decline from it use.

1. High cost/transaction fee for using bitcoin ATM
2. Susceptible to physical damage and attack
3. High cost of maintenance and government regulation
4. Scarce availability of the use of ATM machine for making bitcoin transaction.

The fundamental idea of bitcoin was to abolish ATMs. The medium is electronic, we don't need any ATMs as such. Why? because it is Peer-to-Peer.

If you mean failed to become big, then yeah I think you're correct, the highest Bitcoin ATMs were on 2022, now the total ATMs are stagnant and slightly drop. I don't think it's due to government restrictions, it's more like the cost is too big and it might not be really profitable.

Only tourists and people who're not familiar with Bitcoin use ATMs.

I don't think the demand of Bitcoin ATMs will rise.

That is what I thought. When Bitcoin ATMs launched, many people tried them, but when they found out that the fees were high, and so they stopped. Even though you are rich, that won't give them interest. But it was not just the fees, it was also confirmation delays. Waiting for a minute to confirm the transaction is already disappointing.

If we only have stable fees and instant confirmations, that absolutely gives a better experience for the users. Unfortunately, due to the uncontrollable situation of the market makes it impossible. And this gives them a reason to just prefer using fiat money.

Government regulations I personally think is one of the factors that limited the success for crypto ATM campaign but that I don't think was the major reason. Some persons who were campaigning  for crypto ATM at the start didn't actually have a full knowledge about the service charges but after they learnt of it, they stopped calling for crypto ATM. The ridiculous service charges is believed to be the major reason why crypto marketers stopped clamouring for crypto ATM.

I agree with those who say they have not failed. However, in Europe I think they are on their way to see their use reduced since with the MiCA law they are going to have to implement KYC for any amount from September, although some have already implemented it. If they continue to charge these fees and also with KYC they will lose the main motive they had to be used.

They would be a great idea if the cost and fees could be lowered to within reason, in turn leading to greater demand for the machines,
more machines deployed and more fees collected by the operator. But for now they are still far too expensive to use.

Here's an idea that could possibly work: an ATM machine that handles normal cash/bank card transactions but also let's you do bitcoin transactions.
The fees made from cash transactions could allow the operator to lower the bitcoin transaction fees.

A 2-in-1 machine that does the work of two but takes the space of one also cuts cost.

I remember a time where in the Philippines, if I were to cash out my BTCs, there are specific steps that must be followed and only a limited amount of ATMs are available to accommodate my request.

Probably one of the biggest limitations on why crypto ATMs relatively failed is because of its lack of demand and strict government regulations. Back in 2018, only a small amount of the population in the Philippines knew about the existence of cryptocurrencies. Additionally, the taxation of cryptos were not that fully implemented which made some banks hesitant on implementing further this kind of set up.


Probably it depends per country? I have seen some developed countries where crypto ATMs were fully utilized by the community. On the other hand, in our country in the Philippines, only a few were able to use and take advantage of this privilege. This is perhaps the reason on why banks scrapped off this idea since only a few are using it.

I think this is due to government regulations and the restrictions that have been imposed in the US. In the US, new users can only withdraw up to $2,000 within 24 hours from ATMs, and some other regulations have discouraged many people from using Bitcoin ATMs.

This is the major reason why the usage of Bitcoin ATM machine is very limited because the price in ATM machine is differs always from the current price of Bitcoin in the market thereby decreases the quantity of Bitcoin received by the recipient.

Transaction fees also are way too higher when sending Bitcoin via ATM machine, transaction fees ranges between $15-25 charge and it's way too much.

Government regulation may be the reason crypto ATM failed in some countries, those countries crypto ATM is working well for users to enjoy good service from crypto transaction it may be the regulation that is suitable to the people, Is no longer a new thing to us that banks don't want crypto ATM to dominate local money and it has been the reason crypto ATM failed in some countries because banks don't want crypto ATM to be popular than local money ATM.

I believe this is due to several factors, perhaps the most prominent of which are privacy-related issues and high fees, which have led to insufficient demand for these devices among users, as many prefer to use online trading platforms. Privacy doesn't just mean completing secure transactions and protecting personal data from any suspicious use; it also entails the potential legislative restrictions that could enable authorities to monitor citizens' financial activities. This has led many to avoid using Bitcoin ATMs, even if they are available to them.
Another reason I find important is the rapid technological development, which means a large number of ATMs quickly find themselves outdated and in need of structural updates to keep up. Consequently, operators of these types of ATMs will find that operating costs are disproportionate to market demand, making them a poor investment.

Number one reason is the regulation in the crypto space. Aside from Bitcoin other currencies are bound to be regulated by owners or developers. There is trust issues in keeping their funds in an altcoin for a long term. The only ATM that has managed to work is the Bitcoin ATM. I think El Salvador and Japan has at least one Bitcoin ATM.

Another reason is privacy and security. It seems crypto ATMs are less private. Your crypto card might be hacked or stolen, so many security reasons attached to why it wont work.

No, that's not because of government restrictions, as if government restrictions would be a problem then from the start, BTC might not have been adopted by people. The main problem is we have to be physically there to withdraw money from such ATMs and in many countries that is a bit risky because here in my country, if I would be using a dedicated BTC ATM and people saw me, some of them will surely think I am so rich and must have lot of money.

This is not safe, as anything bad can happen therefore, with this fear most of the crypto users don't even share with anyone that they are involved in crypto. So how can they go to such ATM and use it openly. Besides this, ATM fee are a bit higher but that's really not an option, and in my country there is not a single BTC ATM, as before it was illegal but now it is legal here as well, so I think we need BTC ATMs here.

https://libertyx.com/

All over the place here in the US.
Rates are not great, but it's not like they don't exist.

For some reason they don't always show on coinatmradar so you can add these (possibly) to their count.

As always, it depends on where you are.

-Dave

Well, first First of all, you need to understand that the Bitcoin ATM concept has not yet become popular, so how did it fail? There are still many countries in which Bitcoin ATMs are not being used. So how come you claim that the Bitcoin ATM concept flopped?

If your question is further elaborated that Does Bitcoin ATMs can fail?. So yes, of course Bitcoin ATMs can fail for various reasons. The first disadvantage is that you are physically in danger, like someone can attack you maliciously by looking at you due to Bitcoin. The second is the higher fee which can actually cause the failure of Bitcoin ATMs. So these are the points which can cause the failure of ATMs.

And that is why in those countries where Bitcoin ATH has been launched, people still love to use the online version of Bitcoin transactions.

There are a few in my area, but I haven't used them. I believe that they had to comply with the country's regulations. If I am not mistaken, when they opened here, they didn't require much identification, but we're talking about an era that even exchanges didn't ask for KYC. In the meantime, at least nowadays, they have excessive fees, up to 8%. What's the point of paying such extravagant fees and providing KYC? I would understand it if they were completely anonymous, but this isn't the case here.

It's a shame, because it's an interesting concept. I'm not sure about other countries, but they were quite a flop here.

Crypto ATMs are legal scam.

At least, for a significant portion of ATMs the total fees on a transaction can be as high as 15%. For ONE transaction. A little bit of miner fee, a little bit of spread, a little bit of whatever fee. Compare this to the <0.1% fees of most crypto exchanges. They take advantage of you since you clearly don't read the ToS and cant count in bitcoin.

Also, let's highlight that 99% of those ATMs DO NOT protect your privacy.
They are KYCd with some laughable limit and there are cameras stuck into your face everywhere.

So let's just stick to the "scam" definition. There's no extra service which justifies the horrible fees

It failed because fees are too expensive, besides its access being totally restrict to few major cities. And I believe it must be due to the fact machines' costs are also very expensive. In the digital era, there is no way to compete against virtual exchange apps which fulfill the same purpose of ATMs, while charging cheaper fees and being much more accessible.

ATMs were just a fancy thing restricted to a minor niche of Bitcoin adopters. Probably it can't even be said such machines have become a trend at some point, due to its low range.

I dunno if crypto ATMs really failed so much as they just havent taken over the world like some folks thought they would.  I mean, I can count the number of times Ive seen one of those things on one hand.  They aint exactly on every block where I live, thats for sure.   

But at the same time maybe failed is too harsh and  its not like nobody uses them.  They just havent become as commonplace as the early hype mightve made it seem like they would.   I think they found their niche, but its still pretty small compared to traditional banking.  And for most average folks, that old way still works fine anyway.

Crypto ATMs failed because it puts people at risk for a $5 wrench attack.
For those who don't understand,  the explanation (https://cryptocurrency.org.nz/guides/5-dollar-wrench-attack/)

A lunatic could be holding a $5 wrench near the crypto ATM waiting for their next victim.

This is why I may never use a crypto ATM.

Yeah, I don't think they've failed at all.  If there are fewer BTCATMs than before (which I'm not sure is true since I don't have any data on that), it's because there was a boom a few years ago when it seemed like they were popping up everywhere--and the demand for them just wasn't there.

There used to be one or two machines in my town about 5 years ago, and now there are at least eight.  I don't exactly live in a major metropolitan hub like NYC, either.  There's no way a system like that could sustain itself.  

Also, I happen to agree with those who brought up government regulation.  It's strict in the US, and I bet it's even stricter in other countries.  We'll see what the situation with BTCATMs is in another 5-10 years.  In the grand scheme of things, they are pretty new and a lot of people don't know about them (or don't trust them).

Edit:  BTW, I seriously doubt there are going to be many $5 wrench attacks happening at BTCATM machines that don't seem to be very popular.  Have there been a lot of reports of that happening?

The first reason why the concept of crypto ATM failed to be one of the major concepts driving crypto forward is the high service fee and the exposure of users' private information. These are the major drawbacks most people I have come about, or read on this forum always pointed out, and I believe their reasons to be valid. Based on the previous accident that happened to people who have once used a crypto ATM, and I don't know if this issue occurs due to the strict regulation.
Another one of the incapable online security service features provided by the crypto ATM creator.

The adoption is quite slower than expected, it's not a total failure but it has not reached the expectations of many. during its first stages it had so much hype that made many think that the world is about to shift from the traditional fiat method to a crypto world but then it didn't reach such extent then it began to have limited demands hence making it's spread just slower.

I agree that not many people are using Bitcoin ATMs because of several important reasons. Main problems are privacy issues and high fees which have made people not want to use them. Instead of this they prefer to use online trading platforms. Privacy means not only keeping transactions safe and personal information protected but also being worried about laws that could let authorities watch what people are doing with their money. Another important reason which you already mentioned is that technology is moving forward very quickly which makes many ATMs outdated and in need of updates to stay useful. So people who run these ATMs have to pay a lot of money to keep them running which is not good investment because not many people are using them.

I would like to say an opposite fact than your post, most people don't care about privacy and use online trading platforms don't secure their privacy. Most centralized platforms nowadays have mandatory KYC before you can full access their services and use account with full features.

People dislike Bitcoin ATMs because of anonymity and expensive fee. When they come to a Bitcoin ATM and use it, their anonymity gone and they can face with physical attacks after that. Privacy and anonymity are very different and your post sounds like you misunderstood privacy and anonymity.

People don't care about privacy but perhaps they care about anonymity that is related to their life safety.

Yes, it's the expensive fee that goes with it. And how ironic when we try to compare fiat to Bitcoin as better options, come expensive fees when we try to transact using ATM's. Maybe others will just try for the experience, but other than that, we have like a better more cheaper options to buy and sell our Bitcoin.

As for KYC, it's already mandatory, every entities requires KYC now, exchanges, gambling sites and others. So I don't think that is the main problem. Of course there are still people who wanted to protect their anonymity, but I guess majority now has embrace KYC as part of Bitcoin market.

 don't understand the concept of ATM for cryptocurrency (Bitcoin), why carry out a transaction on an ATM machine when you can conveniently do the transaction on your smart phone. I believe that ATMs should be specifically for physical cash withdrawals because every other money transactions can be done on your online device so I won't be surprised if crypto holders are not interested in it. I hear that the transaction fees is quite high compared to transactions on your mobile device and that is another good reason why it is no longer popular. Besides you cannot find crypto ATMs everywhere and that is why the concept is probably failing.

There are lots of reasons why crypto ATMs fail. First of all, there isn't a big demand or companies choose wrong locations. You have to open a crypto ATM in a city where lots of crypto enthusiasts live but that's not everything. Another reason why they fail is that fees are extremely high. I've heard that some ATMs have charged up to 25% of the value of your transaction. I am a crypto enthusiast and I'd happily use Bitcoin ATMs but why should I use them if I'm about to lose up to 25% of my money? Almost all of crypto ATM owners charge that much and make it impossible for people to use, so of course, they'll fail.

The third reason why they fail is that companies like Binance and XAPO make it very easy to use your Bitcoins in real life. You can send Bitcoins to your Binance or XAPO wallet and then withdraw with their card at any part of the world with very low commissions. It's hard to compete with this business model because it's very comfortable.

Cash is always necessary, and I'd personally use them if I wanted to gradually withdraw my Bitcoin. They would make sense if they were completely anonymous, but at this point, it's literally no use. I can easily sell my Bitcoins to an exchange that has its own debit card, such as Crypto.com or Nexo Card. Since ATMs require KYC, why should someone use them if they can do the exact same thing with an exchange, without paying the extravagant fees? On top of that, that way, you can withdraw from every usual bank ATM, anywhere in the world.

I don't even like the idea of it in the first place. It defeats the privacy thing and exposes crypto fans and investors to attacks from criminals. I mean, why would I want to expose to the public that I hodl what majority of them think makes my different from them in terms of wealth? I rather sell or buy through P2P with ease, even from the comfort of my house.

Unlike regular ATMs? I dont know, but I dont really see a strong connection between the $5 wrench attack and crypto ATMs specifically. As far as I know, most such ATMs are located in very public places and surrounded by numerous surveillance cameras, just like regular bank ATMs.  Wouldnt a regular ATM be just as appealing a target for someone looking to rob someone after they have withdrawn cash? People are getting cash out of those all the time. So if someone is desperate enough to try a $5 wrench attack, they are probably not going to be too picky about whether their victim just used a crypto ATM or a regular one. Cash is cash.

It's more than 3 years now I never own a fiat ATM card and I have never used an ATM machine all these years, yet I make transactions. This could also be likened to ATM machine. There might not be need for it since exchanges and p2p is now rampant.

Instead of convenience, everyone who has tried them told the same thing and that's about the inconvenience that the fees have brought to them. And aside from just preferring to use fiat money, they would just have to stick with the exchanges that gives them better fees and saves them the same time and option for being with them. I'm still optimistic about these Bitcoin ATMs because they'll play a huge role once Bitcoin becomes massive and everyone would crave to have their own Bitcoin holdings, maybe have a fix rate for the fees and a justifying exchange rate.

Do you mean BTC ATM? If you mean BTC ATM, it is untrue that it has failed already.
There are still thousands on BTC ATM around the world. People still can use the BTC ATM which are installed in some areas around the world. I know most of them are placed in USA, but it may spread out in more countries in the future. Although the adoption of BTC ATM isn't quite massive in all countries, it possibly grows toward the raise of the popularity of BTC.

- https://coinatmradar.com/countries/

Besides the factor of regulation made by the government, the high fees is also a big obstacle of the use of BTC ATM. People prefer to use CEX for any transaction since it offers cheaper fees. If the fees on BTC ATM is getting lower, people may use it more often in the future.

IMO, CMIIW..

Bitcoin ATM may be seen increased in near future when majority of are beginning to use Bitcoin,  I believe it may another trending after the Bitcoin strategic reserve has kicked into full action and more countries gets to adopt Bitcoin, this development is what I think may trigger the wide availability of Bitcoin ATMs.

I don't understand your premise that they failed. Where is that written? Who says so? Based on what data?
That is, that they still work, and some countries have even integrated. What are you basing your argument on to show that they have failed? I think the business model still exists. I think you should reconsider the idea if we're going to have a fair and well-directed discussion.

I recommend this source for you to consult the data:
https://coinatmradar.com

I mean it's definitely not a small presence! There has been a stark drop this month in machines due to some regulation whispers and proposed senate bills to monitor the clients and put limits on buying, which is bullshit. Anyone won't just be able to drop 10k in a machine anymore which kills operations profits and therefore we are seeing maybe some divesting. They are targets for scsmmers to hack and also used as a vehicle to get bitcoin from their victims who fall for schemes. Bitcoin ATMs really aren't great in general because of high fees and not really any anonymous aspect due to KYC and AML. Still 35+k machines in the USA alone still which takes up the bulk of the market isn't bad. Slight drawback but I don't think we will see them going anywhere for good for sometime.

What would be defined as a failure for ATMs?

That's the question I put into the perspective regarding the matter..

That can't be the only reason. That's if there is a decline in the use of Bitcoin ATM machines. If you are to make use of your ATM card and you reach your limit, the Bitcoin ATM machine always has a slot for cash deposits, which you can use directly to buy Bitcoin.

I don't think there will be a limit to how much cash you can deposit directly into the ATM using it to acquire Bitcoin. If the ATM card limit was the only problem, people could have sought to use alternative options just to access the machine, but there is more to it.

I use ATMs from time to time because they don't require KYC up to a certain limit, which makes them great for people like me who don't spend much BTC, but from time to time in a bull run want to spend some cash. I can send BTC to an ATM from home, drive to its location and withdraw the money without waiting because my transaction is past confirmation.

Now let's compare that to any exchange. Even when I want just 500 EUR, i will have to send them all my data including a selfie with an ID and all that shit. Why would I want to sacrifice anonymity for a few hundred euro dollars? This is one of the reasons why ATMs have not failed, but if the laws change and they will start scanning your ID every time you want to buy a pair of shoes, they will.

It hasn't failed yet because there're numerous ATM spots in a lot of regions such as in the United States, El Salvador, Spain, Canada, Australia and even in my locality Nigeria, there's an bitcoin ATM.
Although the spreadout of the bitcoin ATM system is depends on each countries supports and regulatory involvement of the governments.
Bitcoin is decentralized and can't just get it ATM installed in the places where the government has not agreed to terms.
Also, a poor security networking system also utters barriers to why bitcoin ATMs can't be installed in a wider range in the society.

It's just in the development, in my opinion. In the process of adjustments by each country in question ;)

Security issues - yeah, they are still there..