On the first day RoboCoin's Bitcoin ATM was deployed, one third of its users were new to the digital currency.
Las Vegas-based RoboCoin deployed its first Bitcoin ATM in Vancouver, British Columbia, Canada on Oct. 29. Bitcoin transactions from the 81 people who used the machine totaled $10,000, says Jordan Kelley, chief executive at RoboCoin. The second day transactions totaled $30,000, he says.
The machine is run by RoboCoin and Bitcoiniacs, Vancouver's first brick-and-mortar Bitcoin store.
RoboCoin's machine is the only Bitcoin ATM that's bidirectional, allowing cash-in and cash-out services. It allows users to generate Bitcoin wallets on the fly and print receipts. The "generate wallet" button is used 72% of the time, even among repeat Bitcoin users, Kelley says.
When consumers use the machine for the first time, it asks to scan their palm for biometric authentication, scan a government-issued ID and then to take a photo of the user, says Kelley. Within five minutes RoboCoin decides if the person at the ATM and the person on the ID are the same and are not on any blacklists, he says.
Though five minutes may seem long for an ATM transaction, it is shorter than the multiple-day process for establishing one's identity with an online Bitcoin exchange and receiving funds, Kelley says. After this authentication process for the consumer's first use, subsequent transactions are much faster, he says.
RoboCoin's ATM limits customers to exchanging up to $3,000 worth of Bitcoin a day, he says. The company plans to launch its next ATM in Boston during the first quarter of 2014.
Whereas RoboCoin is a service provider, Lamassu Bitcoin Ventures, which sells a Bitcoin ATM that allows only cash deposits, takes a more hands-off approach.
As a pure hardware vendor, "we decided to divorce ourselves completely from the operator's service," says Zach Harvey, cofounder (with his brother Josh) of Lamassu Bitcoin Ventures. We "don't want to handle the regulatory side."
Many Bitcoin businesses have been under regulatory scrutiny after the Financial Crimes Enforcement Network issued guidance on virtual currency in March.
In light of the regulatory concerns, "we like to stay reasonably paranoid in this industry," Harvey says.
Whereas online Bitcoin exchanges typically must stay in compliance with state regulations across most of the U.S., Bitcoin ATM operators can take a narrower approach to regulatory compliance, both companies claim.
"With our machine, you only have to be regulated in whatever state you place the machine," Harvey said last month at SourceMedia's ATM, Debit and Prepaid Forum in Las Vegas.
Kelley says the same is true for RoboCoin's device. "RoboCoin was built from the ground up to be compliant" with has Know Your Customer and Anti Money Laundering requirements, he says.
Lamassu Bitcoin Ventures shipped its first of the $5,000 machines and accompanying software in early October. It has sold more than 40 machines altogether.
Moneero, which was previously called BTC Global and is based in Uruguay, is taking a different approach with its Bitcoin ATM by connecting users to Moneero Bitcoin wallet accounts. The company says a Bitcoin ATM could take the technically complicated digital currency out of the geek zone.
Moneero hasn't released one of its machines for public use yet, but plans to deploy its first in Uruguay while it works on becoming compliant with U.S. regulations.