I receive my entire paycheck in Bitcoin. No middleman takes a cut, and the money lands in my wallet whenever I need it. Converting it back to dollars is the catch. Selling through Circle or Coinbase m
I receive my entire paycheck in Bitcoin. No middleman takes a cut, and the money lands in my wallet whenever I need it. Converting it back to dollars is the catch. Selling through Circle or Coinbase means waiting several days for the transaction to clear and the rent money to appear in my bank account.
Local Bitcoin offers one option, but I'd need a buyer present at that moment, and the legal gray area concerns me (I'm not registering as a money exchanger). Bitcoin ATMs could bridge this gap. I tried one last week to grab cash for Halloween festivities. The ATM had both appeal and problems.
The transaction took minutes. The attendant at the Shell gas station was engaged and friendly about the machine. The exchange rate, though, was off from the actual market price, and combined with the 7 percent fee, the costs were severe.
I used a Genesis Coin two-way ATM at the Shell on Chain Bridge Road in Fairfax, Virginia, on Saturday, October 31, 2015. Bitcoin's price had surged to around $325, up from roughly $250 weeks prior. The machine's screen quoted $280 USD per Bitcoin.
That gap cost me about $45 per coin in lost value. I moved forward because I needed the cash right away, and at only $20, the rate mattered less. Plus, I suspected a story might emerge from the purchase itself.
The ATM required identity verification. I could scan a government ID or provide my phone number to receive a verification code. I chose the phone option. The code arrived moments later. I selected $20, a QR code appeared, I scanned it with Circle, sent the Bitcoin, and the cash came out without waiting for blockchain confirmation.
The store clerk mentioned that people often mistake it for a traditional ATM, and that five to seven people use it daily. That surprised me. He seemed unfamiliar with Bitcoin (at one point asking whether people could buy and sell it for money online), yet the machine got regular use.
A Bitcoin ATM getting five to seven customers daily in a Fairfax suburb, 20 minutes south of Washington DC, has found a market. Whether the unfavorable rates explain the traffic, I cannot determine. For ATMs to work as a viable entry point to Bitcoin, exchange rates would need to match actual market prices and fees would need to come down. Physical machines have operational costs (rent, maintenance, restocking) that might make this impossible. Even so, the ability to convert Bitcoin to cash at a physical location has value, despite the steep premium.
I won't use ATMs as my main method for selling Bitcoin, but I'll turn to them in specific situations. We contacted VirtualATM.net, the operator, about the pricing gap and machine performance, and will share their response when they reply.
