Cryptocurrency: Bitcoin ATMs popping up to introduce people to crypto, though few use them
Although there are 31 cryptocurrency ATMs in the Golden Triangle, you’d be hard pressed to see someone using one of them.
The machines have been appearing in gas stations, supermarkets and other visible areas over the past year, but according to several businesses in Columbus who host the machines, they aren’t used much.
Near the checkout lines at the East Columbus Food Giant sits a Bitcoin Depot cryptocurrency ATM. Bitcoin Depot is an Atlanta-based cryptocurrency exchange company that converts cash into crypto. Store manager Dan Price told The Dispatch his store installed the ATM about six months ago. He has hardly seen anyone use it since.
“It’s very poor,” Price said of the machine’s usage. “I imagine when our contract is up, it will be pulled out.”
Store manager of the Riverhill Chevron at 229 Main St. Jay Patel said his store got its Bitcoin Depot ATM in August 2021. At the time, the machine served about 10 people a month. That number has dwindled to two or three, sometimes five a month.
“A lot of folks were asking but right now it’s kind of slow,” Patel said.
What is cryptocurrency?
Cryptocurrency — “crypto” for short — is a largely unregulated digital currency separate from government-backed currencies. The virtual coins can be held in a digital wallet or can be used for purchases.
According to Coinbase, the largest digital wallet service, Bitcoin was created in 2009 and is the first cryptocurrency. Since its inception, the value of a single Bitcoin has fluctuated dramatically. A Bitcoin was valued at 40 cents in 2010; in April 2022, it peaked at more than $64,000. The current value is approximately $24,000.
While Bitcoin is the most recognizable cryptocurrency, more than 19,000 different coins and currencies have been created according to an article by CNBC.com.
What are the Bitcoin ATMs?
Bitcoin Depot says it pays retailers like gas stations and grocery stores a monthly fee for using the space. To use the machine, customers login to their existing crypto wallet or create a new crypto wallet. Then, they select one of three currencies: Bitcoin, Ethereum or Litecoin and an amount of dollars to convert. Once confirmed, the customer deposits dollars to purchase the crypto, paying a 10-20 percent service fee in the process. The purchased crypto coins arrive in their crypto wallet within three to five minutes.
Customers can also use the company’s mobile app as a crypto wallet and its website to purchase coins using a debit or credit card. Other crypto ATMs offer different currencies such as Dogecoin, Dash and EOS.
The machines are marketed toward first-time crypto investors.
“It stands out one time and it’s just repetition,” Bitcoin Depot Marketing Associate Sydney Harper said. “You keep passing it and you’re like ‘I wonder what it does?’ It’s just a way to get people’s attention.”
But is it a credible investment?
Mississippi State University assistant Professor and Ph.D. of Finance Brian Blank told The Dispatch the volatility of cryptocurrency acts much like stocks in a company. The added risk of crypto as opposed to traditional securities such as stocks and bonds is the fact that crypto is not backed by any centralized banking system or underlying assets.
One reason people might choose to invest despite the risk is to hedge against traditional markets. For example, if most of someone’s money is lost in the stock market, they would still have some invested in crypto.
“If you’re in the banking industry and you’re worried that your industry might go away, you might buy some crypto assets,” Blank said.
“Because if your bank stops existing, maybe those crypto assets will be worth more in the future.”
Blank invests a very small amount of his portfolio in a cryptocurrency named Ether.
When Blank’s students come to him with an interest in cryptocurrency, he advises that they invest only what they are willing to lose.
Blank said cryptocurrencies are still mostly a mode of investment rather than a mainstream payment method for goods and services.
“They think that the coin is going to gain value moving forward,” Blank said. So if you think that something’s going to rise in value, you don’t necessarily want to trade it for a pizza or something like that.”
Blank also noted that young people are more likely to invest in crypto. Those who spend more time online feel more comfortable buying something intangible than older generations.
“I think young people are more likely to be technologically savvy, more of their life happens online and digitally,” Blank said. “So they’re more willing to buy things that only exist digitally.”
What is crypto’s impact?
Blank sees the investment utility of cryptocurrencies like Bitcoin and Ethereum (the network Ether is traded on) as the greatest impact on the community.
“People have assets that they’re using to save for something in the future,” Blank said. “Whether that’s retirement or whatever, that’s another type of investment that they can utilize.”
What’s the outlook for those crypto ATMs?
Crypto is definitely growing but the shape it has taken in the world probably won’t remain the same, Blank said. While he expects to find famous currencies like Bitcoin and more technologically updated ones like Ether to still be here in five to 10 years, other currencies will fall off.
In fact, the total market valuation of all cryptocurrencies is approximately $1.1 trillion, down from a high of $2.9 trillion in November 2021, according to coinmarketcap.com.
Blank also believes that while the crypto ATMs are here now, he isn’t sure that they will be used to much effect in the future.
“I would guess that the crypto ATMs that exist will be there for a long time,” Blank said. I don’t know if they will get used more frequently over the next 10 years than they have over the last 10 years.”
There are currently 21 crypto ATMs in Lowndes county, four in Oktibbeha and six in Clay, according to the various companies that own machines in the Golden Triangle.
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