2013-02-23 cnet.com - Need Bitcoins? This ATM takes dollars and funds your accou

[The-Real-Link]

WOW that's going to be awesome if it gets out there in any quantity.

[Zomdifros]

I think this thing could work great for money transfers to foreign countries:

• Suppose a money transfer company has an office in Los Angeles and in Mexico City
• The office in LA installs one of these machines -> Mexicans can hand over cash dollars to send to their family
• If their family in Mexico City has a Bitcoin account, which is unlikely, they could send the money directly
• If their family in Mexico doesn't have a Bitcoin account yet, the money dealer sends the bitcoins to the company account
• The office in Mexico City immediately receives a notice that the money has been sent
• They could hand out cash US dollars to the family, who has been contacted by phone and is waiting at the counter
• The money dealer has an account at a Bitcoin exchange and can easily sell bitcoins for US dollars to be deposited in their Mexican bank account, which could then be used to hand out to the recipients
• Compared to other services like Western Union, money transfer is instant, costs are much lower and this system is easier to use for the money transfer companies

[whitslack]

I wonder what the business model is though. As said on other threads, these machines need maintenance and are not vandalism stable. You can't just put it near the toilets and forget about them. Most likely you would put them on the bar with the bar tender pulling cash out every now and then.

Ok, so now there is this machine. I own a bar in NH. Why would I want it? Commission is 1%. Turn over is $1000 per month (as long as I'm the only one in town) and the machine costs $2000 with internet and electricity? That would mean the commissions pay for it in 200 months? Which bar would do that now? Ok, in New York it would have a turn over of maybe $10k paying for itself if 2 years but which bar would believe that? Sure the makers of the BATM dream of selling thousands but I guess they are ahead of time with this. Either they pay bars to be allowed to put the machine there and earn the commissions or the bars are not ready for that yet.

The business model is to manufacture and sell machines to merchants. They can set the commission to whatever they want, and they keep it all. We are not looking to be a service provider. The motivation for us is to promote Bitcoin globally so our own investments in Bitcoin appreciate in value and, secondarily, to turn a profit on selling machines. The motivation for the merchant is to earn a continuous profit stream on the commissions.

$2000 would be on the high end of the price range we would ask for the machine. We're thinking more in the $1000-1500 range. Electricity usage is minimal: it draws around 40 watts (most of which is for the screen backlight). It doesn't need a dedicated Internet connection; most places that would install this would already have Wi-Fi on site. We'll also have a 3G option, and that will of course have a monthly service fee from a cellular service provider.

The initial target audience is retail establishments that already want to accept bitcoins from customers. Customers who inquire and learn about Bitcoin will naturally want to know where they can acquire them. Such merchants would love to be able to tell their Bitcoin-interested customers that they can purchase bitcoins on site from a machine. Such a feature would establish a repeat-customer loyalty for the merchant as well.

$1000/mo. throughput would be ludicrously low. We put through almost $5500 just at Liberty Forum, which was one weekend. Granted, the Bitcoin adoption density at Liberty Forum is higher than anywhere else in the world (except maybe PorcFest), but adoption is increasing all the time. By the time these machines are ready for mass production, there will be areas with high enough adoption density to make a compelling business case for installing a machine in a high-traffic location.

[giszmo]

I wonder what the business model is though. As said on other threads, these machines need maintenance and are not vandalism stable. You can't just put it near the toilets and forget about them. Most likely you would put them on the bar with the bar tender pulling cash out every now and then.

Ok, so now there is this machine. I own a bar in NH. Why would I want it? Commission is 1%. Turn over is $1000 per month (as long as I'm the only one in town) and the machine costs $2000 with internet and electricity? That would mean the commissions pay for it in 200 months? Which bar would do that now? Ok, in New York it would have a turn over of maybe $10k paying for itself if 2 years but which bar would believe that? Sure the makers of the BATM dream of selling thousands but I guess they are ahead of time with this. Either they pay bars to be allowed to put the machine there and earn the commissions or the bars are not ready for that yet.

The business model is to manufacture and sell machines to merchants. They can set the commission to whatever they want, and they keep it all. We are not looking to be a service provider. The motivation for us is to promote Bitcoin globally so our own investments in Bitcoin appreciate in value and, secondarily, to turn a profit on selling machines. The motivation for the merchant is to earn a continuous profit stream on the commissions.

$2000 would be on the high end of the price range we would ask for the machine. We're thinking more in the $1000-1500 range. Electricity usage is minimal: it draws around 40 watts (most of which is for the screen backlight). It doesn't need a dedicated Internet connection; most places that would install this would already have Wi-Fi on site. We'll also have a 3G option, and that will of course have a monthly service fee from a cellular service provider.

The initial target audience is retail establishments that already want to accept bitcoins from customers. Customers who inquire and learn about Bitcoin will naturally want to know where they can acquire them. Such merchants would love to be able to tell their Bitcoin-interested customers that they can purchase bitcoins on site from a machine. Such a feature would establish a repeat-customer loyalty for the merchant as well.

$1000/mo. throughput would be ludicrously low. We put through almost $5500 just at Liberty Forum, which was one weekend. Granted, the Bitcoin adoption density at Liberty Forum is higher than anywhere else in the world (except maybe PorcFest), but adoption is increasing all the time. By the time these machines are ready for mass production, there will be areas with high enough adoption density to make a compelling business case for installing a machine in a high-traffic location.

Ok so the liquidity would come from the bar running this machine, not from your service? That is a huge maintenance bonus.
Ok so it is for places that accept bitcoins and want an easy answer to where to obtain bitcoins? Then maybe they set the fee to 10% just to offer some solution but not to attract people from a 200 miles radius to buy cheap coins. This way it makes sense to have it in a shop that accepts bitcoins although it is a bit artificial to buy the coins I'm intending to spend in the same shop where I could pay with $$ for x% less directly. Well, it's new so people will use it.

So you take the $5.5k/week at Liberty Forum as a reference value with all the geeks and reporters that tried it out just to know what it was? And want to sell thousands? In Germany there is exactly one shop I know of that accepts bitcoin and I am almost 100% sure he is not getting $5.5k worth of bitcoins per month. I know in the USA there are some more shops, but thousands? To make a turnover of thousands each? No way. BitPay bragged about having sold their solution to n customers and days later they bragged about having processed 2n purchases. Sorry I don't remember what n was exactly but 2 purchases per webshop is exactly nothing and that's about what I would expect if you managed to bulk sell these BATMs to McDonalds for example. Having one in every major city, yes, that would work but not thousands. Not this year and maybe not next year neither. I hope you proof me wrong.

[Dusty]

The business model is to manufacture and sell machines to merchants. They can set the commission to whatever they want, and they keep it all. We are not looking to be a service provider. The motivation for us is to promote Bitcoin globally so our own investments in Bitcoin appreciate in value and, secondarily, to turn a profit on selling machines. The motivation for the merchant is to earn a continuous profit stream on the commissions.

Hello whitslack,
personally I think there is way too little usage of Bitcoin to make your machine profitable for a casual magazine, but the thing could be completely different if your ATM could do also the opposite: convert bitcoins to cash.

Have you thought about it?
Is it technically feasible, and would you consider it?

[Elwar]

I went to a bar once where they had an ATM there and they would only accept cash (no cards). So when you went to pay your bill you would go to the ATM and get cash, then give it to the bartender. I assume it was because the bar did not want to claim all of the money they made at the bar.

I have also owned a bar and would not really see the point in cash paying customers converting their cash to bitcoins. It would be of little benefit to me as a bar owner other than the novelty factor of getting a few geeks to come in and try it out to promote Bitcoin.

What would make this ideal would be an actual ATM that accepted ATM/debit cards which would then convert it to Bitcoin (if necessary for legal reasons it could spit out cash to then be fed into the cash to bitcoin portion. That way you could say that you charge 3% for cards but take bitcoins for no extra charge. They would then have the incentive to want to save 3% and go through the process to get the BTC.

[13Charlie]

Sure the makers of the BATM dream of selling thousands but I guess they are ahead of time with this. Either they pay bars to be allowed to put the machine there and earn the commissions or the bars are not ready for that yet.

I agree. It would be an incredibly hard sell to any bar/restaurant/retail shop owner.
Also, what about laws governing currency exchanges?
Would the new BATM owner not be regulated by these laws?
Would they have to buy a BATM and a currency exchange license?

Don't get me wrong, I would love to see these things in every other bar or restaurant.
But it seems this project may be starting off on the wrong foot.

[ShireSilver]

Also, what about laws governing currency exchanges?
Would the new BATM owner not be regulated by these laws?
Would they have to buy a BATM and a currency exchange license?

I just want to point out that here in New Hampshire, destination of the Free State Project, devices like this are covered under vending machine laws and not ATM laws as long as they aren't depositing into bank accounts. The fact that this machine is limited in functionality actually gives it an advantage in that it can slip around regulatory hurdles.

[matonis]

Sure the makers of the BATM dream of selling thousands but I guess they are ahead of time with this. Either they pay bars to be allowed to put the machine there and earn the commissions or the bars are not ready for that yet.

I agree. It would be an incredibly hard sell to any bar/restaurant/retail shop owner.
Also, what about laws governing currency exchanges?
Would the new BATM owner not be regulated by these laws?
Would they have to buy a BATM and a currency exchange license?

Don't get me wrong, I would love to see these things in every other bar or restaurant.
But it seems this project may be starting off on the wrong foot.

I disagree. How is this any different than installing a regular vending machine that sells peanuts and condoms? Why do you automatically assume the worst and shout "Oh my God, it's a currency exchange machine and it's unlicensed!"

People, it is a simple vending machine that sells intangible math puzzles. They could also build a machine that sells air guitars. It would be the same regulations.

[matonis]

I think offering a Bitcoin ATM and not accepting payment in Bitcoin would reveal a serious schizophrenic business vision on part of the bar owner.

Perhaps. I would think shop owners would find the profit margins on machines pretty good and the machines would act like advertising bringing in additional foot traffic. So even if the machines did not make much money selling bitcoins they could make money selling other stuff.

+1  The Bitcoin Machines would generate a lot of traffic and I would definitely go to stores that had them (and use them). They're going to need to be bolted down a little better cuz they'll be stuffed full o' cash from all of the people wanting bitcoins privately.

[13Charlie]

Why do you automatically assume the worst and shout "Oh my God, it's a currency exchange machine and it's unlicensed!"

I was not assuming the worst or shouting anything.
I was asking questions in hopes that someone would provide answers.

Like this

I just want to point out that here in New Hampshire, destination of the Free State Project, devices like this are covered under vending machine laws and not ATM laws as long as they aren't depositing into bank accounts. The fact that this machine is limited in functionality actually gives it an advantage in that it can slip around regulatory hurdles.

@ShireSilver - Thanks for clearing that up for me.

[Richy_T]

I went to a bar once where they had an ATM there and they would only accept cash (no cards). So when you went to pay your bill you would go to the ATM and get cash, then give it to the bartender. I assume it was because the bar did not want to claim all of the money they made at the bar.

If they take your card, they pay the fee, if they make you use their ATM, they get all the money and a kickback from the ATM provider. That's all it's about.

[Richy_T]

The business model is to manufacture and sell machines to merchants. They can set the commission to whatever they want, and they keep it all. We are not looking to be a service provider. The motivation for us is to promote Bitcoin globally so our own investments in Bitcoin appreciate in value and, secondarily, to turn a profit on selling machines. The motivation for the merchant is to earn a continuous profit stream on the commissions.

You may not want to be a service provider but you may want to partner with someone who would.

A model I have seen before is that machines are dropped off at bar, coffee shop, whatever at no cost to the proprietor and when the money is counted up at the end of the month, the shop owner gets a part of the profits. This takes all of the risk and cost from the shop owner (something often a huge issue in the current economic climate). The middleman provides flexibility but takes a profit from the deal.

The problem would be finding someone willing to take the risk. But I suspect you might have more of an problem convincing shop owners to jump on-board. It would probably be easier and safer to find a way of taking some of that risk from the middleman than from a shop owner too.

[420]

Is this up and running? berwick wanted the same thing in Cyprus