A new app has emerged at tobacco shops in the northwestern U.S. state of Montana, gas stations in the U.S. states of North and South Carolina, and delis in the furthest corners of New York City: brightly-lit bitcoin withdrawals, where customers can buy and sell digital currencies and sometimes withdraw cash. machines (ATM).
Bitcoin ATMs, which have skyrocketed in numbers in the US over the past year, have been fueled by the frenetic surge in cryptocurrencies transactions that drove the digital currency bitcoin above $58,000.
Bitcoin ATM operators such as CoinFlip and Coin Cloud have installed thousands of bitcoin ATMs, exploring areas that rival companies have yet to reach.
“I assumed there was demand for (Bitcoin) and people were looking for bitcoins everywhere,” said Mark Shoiket, founder of Quad Coin company, who went to the state of Montana after examining the US map to find where Bitcoin ATMs are in the minority.
After a week’s travel, Shoiket found seven spots to install bitcoin ATMs in Montana, including a tobacco shop called 406 Glass. As of January, there are 28,185 bitcoin ATMs in the US, according to data from the Howmanybitcoinatms.com platform. About 10,000 of these have been installed in the last five months.
The increasing popularity of Bitcoin has been the main reason for the establishment of new ATMs. The reasons why people use ATMs instead of online transactions vary. Some get paid in cash, some may not have bank accounts, some want to send money abroad or remain anonymous, and some feel more comfortable transacting with a physical machine.
Rebecca White, 51, a bitcoin investor living in the Pittsburgh area, makes big investments online and uses bitcoin ATMs when her family needs extra cash.
“If we have $60 left while we do our grocery shopping (say), I stop by the bitcoin ATM,” says White.
Some machines only offer bitcoin, while others allow customers to invest in a variety of digital currencies. However, very few bitcoin ATMs actually offer cash. Bitcoin ATMs charge more transaction fees than regular ATMs and online transactions.
Pamela Clegg, director of CipherTrace company, stated that the commission deducted from transactions at bitcoin ATMs ranges from 6% to 20% of the total transaction.
Chris McAlary, CEO of Las Vegas-based bitcoin ATM operator Coin Cloud, which has 1,470 bitcoin ATMs across the US, announced that the company aims to increase the number of ATMs to 10,000 by the end of this year.
Rival company CoinFlip has increased its bitcoin ATMs from about 420 last year to 1,800 this year.
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