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Wondering why should you use blockchain in a bitcoin ATM business?
In this article, I am going to examine why companies should use blockchain in a bitcoin ATM business.
Let‘s get started.
Using blockchain in a bitcoin ATM business
Let’s discuss what’s so revolutionary about using blockchain in a bitcoin ATM industry.
There is quite a big difference between a normal bank account ATM and a digital currency ATM. If bitcoin ATM‘s only just appeared on your radar fairly recently, and you have never had the chance to use one, then the most obvious difference is that you don‘t need any form of a card such as a debit card to operate them.
Users only need to access their bitcoin wallets on their phones and initiate transactions by scanning a QR code with their camera.
Another fundamental difference between the two is that a crypto ATM business does not connect directly to a bank but rather to a bitcoin exchange. The good news is that digital currency ATM‘s are designed to operate as much like a normal ATM as possible.
For an experienced user, overall transaction speeds are relatively similar between the two machines. However, the great news is that you don‘t need to worry about lost or stolen cards when using a cryptocurrency machine. It’s also good to know that nowadays, you can easily build your own bitcoin exchange website.
Problems Facing Bitcoin ATM‘s:
Before I examine why bitcoin ATM manufacturers should use blockchain for their ATM‘s, here are a few of the issues that currently face a bitcoin ATM operator:
- A limited number of bitcoin atm machines
- Relatively small customer base for bitcoin cash
- Lack of government oversight/regulation
- No protection against fraud
- High fluctuation in the price of bitcoin ATM operation and bitcoin exchange rates
- Lack of consumer trust
I believe most of these issues can be overcome by increasing customer trust in cryptocurrencies. That is where blockchain technologies can help out.
Why use blockchain for a bitcoin machine?
The answer to this question is quite straightforward – security. While there are other benefits of operating bitcoin atm business, the most obvious benefit comes in the form of increased security.
The fact that distributed blockchain ledgers are immutable has made the technology appealing even to normal bank ATM providers too. One of the world‘s leading ATM providers, Diebold, recently expressed a strong interest in developing blockchain solutions to underwrite parts of its ATM business.
“Diebold also sees the potential of the technology to tame the issues with data privacy laws and data security related to payments.” – Source: Devon Watson, VP of Global Software and Strategy at Diebold – BITCOIN ATMS AND BLOCKCHAIN APPLICATION IN THE ATM INDUSTRY.
The unalterable ledgers created by blockchain technology would help to protect both the customer as well as bitcoin ATM operators from fraud.
Since the blockchain has no single point of weakness, there is no one point for hackers to hack and alter data. Therefore, by applying blockchain solutions to any of the processes that underwrite the operation of a bitcoin ATM, such as the recording/confirmation process of identification, etc., operators would be protected from any claims of wrongdoing.
The article then goes on to highlight the really exciting application of blockchain technology into bank ATM‘s, namely the ability to eliminate the “need for settlement between banks to occur directly on the network or through the third-party (products)”.
“Instead, anyone potentially would be able to save fees charged for ATM use by connecting to one of the supernodes (which can be another bank) and establish a payment channel with them.”
This would in effect allow banks to massively reduce fees as they wouldn‘t need to process the vast majority of transactions being transacted through their machines.
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This concept could be used to eliminate the chief problem affecting bitcoin ATM‘s. At the current time, bitcoin ATMs are standalone machines and are not linked to banks or other payment systems such as Paypal or Transferwise, etc.
By creating a shared blockchain network that allowed ATM users access between these various institutions would finally give users complete and easy access to all their funds. As a result, users would be able to easily make payment transfers between their various fiat currency accounts and their bitcoin wallet.
While it will certainly be no easy task getting banks to agree to such cooperation en masse, some banks have already shown themselves as willing to cooperate with the buying and selling cryptocurrencies.
Such a system would also have the express benefit of saving consumers money as it would lower fees. Though some of these might end up reducing ATM provider‘s profits, it would inevitably result in their ATMs being used more which would offset such losses.
Finally, the implementation of blockchain technology to allow for the transfer of deeds and property via smart contracts could see the use of ATM‘s jump massively.
Imagine being able to go to an ATM and do everything from recharge your phone to sell your home. The sky is the limit when it comes to the implementation of smart contracts, and all of this could be done through an ATM.
My Final Thoughts
We might be some way off heading to our nearest bitcoin ATM to initiate a divorce or to sign a contract for our latest smartphone, but as I have indicated, blockchain technology has the potential to make this more than science fiction.
At the current time, the most obvious benefits include securing some of the underlying transaction records and processes that a bitcoin ATM undertakes.
However, since any blockchain transaction requires validation from all participants on the network, ATM operators would be required to establish a network that comprised only of quick respondent nodes to ensure that transaction speeds were as fast as possible.
The rewards for overcoming these development problems would be enormous. Any bitcoin ATM using blockchain technology would be secure from cyber-attack including the many of the kinds of attacks that have affected conventional bank ATMs for years.
If you, as a business owner or a CTO, are looking forward to invest in blockchain technology for your business, today is the right time. DevTeam.Space can help you harness the potential of this emerging future technology right from the beginning.
You can get in touch with us via this quick form and one of our technical managers will link you with the expert team of blockchain developers for your software development project.
Top FAQs on Blockchain in a Bitcoin ATM Business?
Bitcoin ATMs with decentralized and distributed ledger technology promise increased security and speed at much lower money transaction costs than traditional bank ATMs.
Smart contracts will help customers carry out all kinds of transfers online. As smart contracts are unaltered, both parties would be sure of secure exchange of services/currency between them.
Some obstacles in the way of bitcoin ATM businesses are lack of customer trust, low number of bitcoin ATM machines, lack of government support, etc.