Has anyone setup a Bitcoin ATM?

[CoinATMRadar]

Hi  @CoinATMRadar, this is a great piece of advice. Do all BTC ATM machines need to establish a bank relationship such as signing formal agreement with banks? I am interested to know what is the OS or system that the ATM machine is hooked up to and what exchange it is hooked up to. I boldly assume that is it some form of custom software linked up with API of a major exchange such as CoinBase that calculates exchange rates.

This is not dictated by any bitcoin ATM for sure, generally you may run this business without having a bank relationship at all. But then you need to convert your cash to bitcoins in some way on regular basis. E.g. if you find a miner that will be ready to sell you bitcoins for cash - then you just found a workaround. There could be other examples. The ideal case with having bank account basically means you get exchange feed with a minor exchange fee (like 0.2%). In case of buying bitcoins in other places - you need to negotiate the price. E.g. miner will want to sell you bitcoins at higher than exchange rate, because he will need to somehow deal with your cash later on.

According to my discussions with operators - to find a bank, that will know about your bitcoin business and still continue relations - is very very hard.
It is not only about "bitcoin" which banks resistant to, but also you will deal with a lot of cash, which makes it even harder to persuade the bank. They just treat you as too risky and close accounts.

In Australia there was a case, when machine operator was fully AML/KYC compliant (obeyed all required laws), but banks didn't want to have such a customer.

Generally, as it turns out in North America (US, Canada) it is pretty similar nowadays.

But again, this is not required by any machine. As normally every bitcoin ATM software supports both: operations from your hot wallet (in this case you might no even connect it to exchange, but replenish manually), or automatically repurchase coins from exchanges and get deposited to your hot wallet. It works like this: you have some liquidity in your hot wallet, whenever customers buy bitcoins from you - there is a mirror deal on the exchange for the same amount.
It is better because you do 2 deals immediately, and get your fees in a guaranteed ways. Otherwise (manual replenishment) - you hold the exchange risk, because after you purchased bitcoin the price might go up or down before customer purchases from you. In case of exchange mirroring you bare the exchange risk only for the amount of your liquidity volume, which is much lower.

Connection to exchange is usually just a setting which you need to do in the back office of the machine one time. Different bitcoin ATM manufacturers support different ones, but the general ones are usually supported.
As an example, go to general bytes site: http://www.generalbytes.com/batmtwo/

And you see supported exchanges:
Bitstamp.net   Yes
Coinbase.com   Yes
Bitfinex.com   Yes
TheRockTrading.com   Yes
Cointrader.net   Yes
Quadrigacx.com   Yes
Kraken.com   Yes
Digitalx.com   Yes

Also there is a list of supported wallets:
Blockchain.info   Yes
Coinkite.com   Yes
bitreserve.org   Yes
Coinbase.com   Yes
Bitcoind   Yes
Litecoind   Yes
Dogecoind   Yes
Block.io   Yes

[ryandanielt]

Please learn from experience, if you don't have deep pockets and a well established business plan then you will end up far in debt. Currently owning 5 it took thousands just to finalize my MSB license with the revenue of canada and without that they can and will take you for everything you own.

After that you need to make sure that you have really deep pockets to be able to handle the conversions of money because yes people do use the machines and they do run out fast if not attended properly.

Also you will need insurance and well established business plan to get the proper insurance policy for a MSB.


Anything happens to the location your machine is in and is result of your machine being there then the location owner will hold you accountable and you will be in financial crisis.


I suggest do your research before making the purchase of a machine, most people just buy a machine and then realize these things after loosing all there money.

[helloeverybody]

So basically you need some pretty deep pockets if you plan on doing it properly, or at all even. Its a lot of work to be able to get one of these things going but overall the more we can get out their the more bitcoin can hopefully grow.

[Emersonnets]

I don't think this will workout unless you got some deep wallets backing you up in this.
Unless you are the one with a deep wallet and are able to invest into an Bitcoin ATM. I heard renting a spot for the ATM itself could already be expensive enough.

[ryandanielt]

I don't think this will workout unless you got some deep wallets backing you up in this.
Unless you are the one with a deep wallet and are able to invest into an Bitcoin ATM. I heard renting a spot for the ATM itself could already be expensive enough.

You dont rent spots, you provide store owners with a fixed percentage of what the machine brings in income wise!

[msc_de]

Check out these guys: http://projectskyhook.com/

wow， great 

[CoinATMRadar]

wow， great 

Doesn't sound really great after reading this.

[unamis76]

I am wondering what is the cost and procedure of setting up a bitcoin ATM machine.

I am guessing it involves:

(1) Buying the physical machine (One time cost).

(2) Calibrating the machine to accept currency notes of your country (One time setup).

(3) Getting an internet line (Monthly recurring fees).

(4) Hook to a central exchange (Probably a recurring fee)

This sounds like an overly simplistic model. Am I missing out anything?

You are on the right track, but there are several more:

(5) You need to have bank relationships, in order to convert cash into money you can wire to exchange. And it is not more about costs of maintaining account, but rather to get such a bank willing to work with you.
On low volume however you might not report about your activity to bank and just deposit cash to your account, however, on professional volume it doesn't work as 1 machine brings about 20-30K of cash per month. Imagine you have 5 machines, that means you will have to deposit 100-150K of cash per month, banks won't miss it for sure.

(6) Renting a place. Ideally you could find some enthusiast who runs a local business and would like to put your machine at his/her place for free, but to get a good traffic location like in the shopping mall - you will definitely have to pay for this.

(7) Cash logistics costs. You will need to collect cash out of ATM regularly. Of course, at start you could do this yourself, but having several machines - you will need to spend much more time just to visit those + some robbery risk involved. If you assign this to professional - will cost you additional fee do have this task done.

(8 ) It was mentioned already to some extent and it depends on your location - but you might need to get licensed first in order to run such a machine. This is not undoable, and almost always possible, however, it might be very costy, e.g. pay to lawer to consult first and understand do you really need it and what kind of licenses  you need, then applications and costs associated with getting license.

(9) Maintain business costs: you need to have support line, you need to do accounting, normally you need to be KYC/AML compliant, so have the policy written, also somebody take the role of AML officer for your business. I mean you could do all this stuff yourself, but if it grows - you will definitely need to distribute tasks and pay for this.

In general, this is all comes to my mind.

Somebody here mentioned Skyhook - not advised, machines are not supported and many reported, that order paid, but never received machine. So looks like Skyhook and Robocoin are history, although there are several installations still present.

If you look at bitcoin ATM manufacturers, I would advise to look at: lamassu, genesis coin, general bytes, bitaccess, bitxatm.

Here are also some useful links to start from:

Bitcoin ATM ROI calculator
How much bitcoin ATM can earn (real examples)
What to pay attention when you want to operate a bitcoin ATM

There is much more useful info on the site (coinatmradar) as well as in the blog, so hope it will help you. There are all locations currently known with bitcoin ATMs, fees information.
General bitcoin ATM industry statistics is summarized here.

In general bitcoin ATM is a very interesting business opportunity, but this is not something you can earn a bunch of money over night. There is a lot of hard work involved.

Pretty interesting post. Some things there that have never occurred to me. Thanks, especially for your links

[Erkallys]

No, I'm sure this cost no more than a few thousand dollars. If this really cost 100 000 dollars or euros, this is sure I'll never set up one.

Right, 100K is just out of the loop.
Normally they cost about 5-6K depends on manufacturer and features.
The cheapest one-way is General Bytes for about 3K, the cheapest 2-way is probably bitxatm for ~5K, but I find others although a bit more costly, but more preferable (my own opinion).

What do mean one-way and 2-way ? This is how much volume it can handle ? Maybe this is about security ?

[CoinATMRadar]

What do mean one-way and 2-way ? This is how much volume it can handle ? Maybe this is about security ?

This is kind of standard terminology:

• one-way are those machines that capable only of selling bitcoins to users (support "one way" only)
• two-way are those which allow to buy bitcoins and also sell bitcoins.

Currently in the world the split is 40% two-way vs. 60% one-way bitcoin ATMs.

[Mr.grin]

it's really cool, is there someone who uses the ATM bitcoin here, if there was definitely very cool 

[biggbox]

Please learn from experience, if you don't have deep pockets and a well established business plan then you will end up far in debt. Currently owning 5 it took thousands just to finalize my MSB license with the revenue of canada and without that they can and will take you for everything you own.

After that you need to make sure that you have really deep pockets to be able to handle the conversions of money because yes people do use the machines and they do run out fast if not attended properly.

Also you will need insurance and well established business plan to get the proper insurance policy for a MSB.


Anything happens to the location your machine is in and is result of your machine being there then the location owner will hold you accountable and you will be in financial crisis.


I suggest do your research before making the purchase of a machine, most people just buy a machine and then realize these things after loosing all there money.

This discussion is getting more and more informative! Thank you all for the inputs!


More factors come into the picture such as insurance, and overcoming local laws & regulations. Did you have any problems with getting your machines insured? I assume you are protecting against theft/loss of funds? I am interested to know what is the coverage.

Secondly, when it comes to overcoming local regulations, what is the lead time and the typical challenges they posed to you?

[knightkon]

Setting something like this up should cost no more than about $1,000.  I say this because you do not want to use cheap product and you do not want it the be easily destroyed.  The system program should be pretty simple, but you have to be able to control it and the fees associated with such a thing are going to be more than what people are used to.  I send transactions all the time and over 1/2 of the transactions I place are charged no fees.  It is will take time for people to get used to the fact that they have to pay a fee when they did not have to in the past.

[ryandanielt]

Please learn from experience, if you don't have deep pockets and a well established business plan then you will end up far in debt. Currently owning 5 it took thousands just to finalize my MSB license with the revenue of canada and without that they can and will take you for everything you own.

After that you need to make sure that you have really deep pockets to be able to handle the conversions of money because yes people do use the machines and they do run out fast if not attended properly.

Also you will need insurance and well established business plan to get the proper insurance policy for a MSB.


Anything happens to the location your machine is in and is result of your machine being there then the location owner will hold you accountable and you will be in financial crisis.


I suggest do your research before making the purchase of a machine, most people just buy a machine and then realize these things after loosing all there money.

This discussion is getting more and more informative! Thank you all for the inputs!


More factors come into the picture such as insurance, and overcoming local laws & regulations. Did you have any problems with getting your machines insured? I assume you are protecting against theft/loss of funds? I am interested to know what is the coverage.

Secondly, when it comes to overcoming local regulations, what is the lead time and the typical challenges they posed to you?

Any types of insurance that have anything to do with any type of MSB is not easy to get, its more costly to acquire this insurance as not every broker can provide it. For MSB Insurance there is a minimum of 2 Million liability and then you need to individually insure any and all equipment. Its a time consuming process that can take months if lack of knowledge is present.

When it comes to registering with the government there are a lot of things that come into play, they require a reputable business lawyer to submit your application and deal with them directly and there are a ton of fees that they request little by little as they see fit.

Many think you can just buy a machine and put it in a store not realizing that the government right away sees that as a type of money laundering as you are exchanging local currency.

If you play all your cards right and do everything asked of them you can be licensed and up and running within a month but then there are a lot of other things that come into play. Have you ever wondered why banks have limits on amount of money that you can take out of a machine?

Same comply s with BTC ATM's, when converting up to a specific amount per day they start to require documentation and such. Again its regulated against laundering laws.

[Rizky Aditya]

I haven't personally setup a Bitcoin ATM, but I have seen a couple of them around. I have never used one though, I prefer to buy Bitcoins off localbitcoins.

it's really cool, is there someone who uses the ATM bitcoin here, if there was definitely very cool 

The only Bitcoin ATM that I have seen, has a large amount of fees. So who would want to waste money like that?

[U2016]

if you are looking for space , then i can provide you a space on lease.

[biggbox]

Hi. I amended the first post to include the informative replies in this discussion.

@CoinATMRadar, @ryandanielt, Thank you

[btckold24]

If I owned a store or like a small business I would definitely get a bitcoin atm.

I know if someone had one near me I would use it which would get me into their store
also

[greBit]

If I owned a store or like a small business I would definitely get a bitcoin atm.

I know if someone had one near me I would use it which would get me into their store
also

But I heard there are some Bitcoin ATM but their charges are too high but I am not sure just heard about it.

[cointtoo]

I think one of BTC ATM companies was already selling them in a way similar to this and the cost of each was in the range of 25,000$