Andreas Antonopoulos Thinks Bitcoin ATMs Need to Be Completely Redesigned

Bitcoin Magazine
Andreas Antonopoulos Thinks Bitcoin ATMs Need to Be Completely Redesigned

Mastering Bitcoin Author Andreas Antonopoulos recently gave at talk at Harvard’s i-lab, spending much of his time in front of a small audience describing the various issues with Bitcoin as a brand. He noted many problems with the terminology[add link to bitcoin terminology is broken and wrong piece] used in Bitcoin, and he also focused on specific products or services in the Bitcoin space that seem to be doing a disservice to potential users.

At one point during the presentation, Antonopoulos turned his attention to Bitcoin ATMs, asking the audience how many of them had used one of the machines in the past. While a few people raised their hands, those hands went down when Antonopoulos then asked how many of them enjoyed their experience with the Bitcoin ATM.

How Traditional ATMs Work

To explain the user experience issues with Bitcoin ATMs, Antonopoulos first talked about the setup of traditional bank ATMs:

“When you interact as a person with an ATM, 1. you have a pre-existing relationship with the bank or financial institution; 2. you have a pre-existing balance; 3. your primary objective is to get in, get cash, [and] get out. Twenty seconds is too long. Three clicks is too long.”

In other words, there is no need for long explanations or user-onboarding with traditional ATMs. Everyone who uses them already has a debit card, and they’ve already interacted with the corresponding bank in the past. The process can be simple because the user already has his or her bank account setup.

Bitcoin ATMs Have Nothing in Common with Traditional ATMs

According to Antonopoulos, many Bitcoin ATM developers have been looking too closely at how traditional bank ATMs work when designing their own machines. He noted that Bitcoin ATMs have “absolutely nothing” in common with the ATMs that are currently used by banks, and he went on to describe the experience an average person has when attempting to use a Bitcoin ATM for the first time:

“The average user of Bitcoin ATM is someone who has never seen bitcoin before. It is a person who doesn’t understand what bitcoin is, and the ATM is their first introduction to this currency. It is a person who does not have a pre-existing relationship with anyone in the Bitcoin space. It is a person who does not currently have a wallet because they didn’t know they needed one – because they don’t know what a wallet is (it’s a keychain). And so they walk up to this machine, and this machine has been designed by engineers to simulate the experience of an ATM, even though the experience shares absolutely nothing with the use case we’re putting it to. So you walk up and the ATM tries to give you bitcoin in as few clicks as possible with a minimum amount of interaction. Is that a way to build brand loyalty? Is that a way to build user experience? Is that a way to introduce new users? I mean, it just throws it at you, and you’re not ready for that. But, ‘Please open your phone and display your QR code.’ Like, what? What’s a QR code?”

In an effort to solidify the point that Bitcoin ATMs should not be operating in the same manner as traditional bank ATMs, Antonopoulos then went through a long list of questions that a user would likely have while attempting to use a Bitcoin ATM for the first time.

The Right Model for a Bitcoin ATM

After describing the problems with currently available Bitcoin ATMs, Antonopoulos explained how he would design such a device:

“If I was designing a Bitcoin ATM, first of all, I’d put it in bodegas. Secondly, it wouldn’t have a lick of English on it. It’d be all-Spanish because I’m going to really push the remittance model. Thirdly, the first function on the ATM would be ‘Send money to Mexico City.’ That’s it. Because I want people to use the bitcoin for something. [Fourthly], I’d have a big button on the front that says ‘Talk to a human.’ I’ve got an Internet-connected device with a forward-facing camera and a tablet screen, and I’m not using it to do video customer service? Are you kidding me?”

It’s clear that the device Andreas Antonopoulos is imagining is completely different from a traditional ATM. In addition to the focus on international remittances, Antonopoulos also expanded on the idea that the Bitcoin device needs to teach the user about the peer-to-peer digital cash system:

“I don’t want to interact for fifteen seconds. I want to interact for two hours . . . And it tells me where I can spend [bitcoin]. It gives me suggestions on wallets, and it can send them directly to my phone. It’s building loyalty, brand and experience. That’s not a 15-second interaction.”

This is a perfect example of how sometimes simply applying the old ways of doing things to Bitcoin will not work. The most impactful innovations in the Bitcoin space have been the ones that created something completely new rather than thinking about how things worked in the past. Developers and entrepreneurs should try to avoid simply replacing the carriage with an automobile. It’s time to get rid of the horse.


Photo BTC Keychain / Flickr (CC)

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Investors Weigh Bitcoin’s Prospects as Fear Levels Rise Across Global Markets

As weak economic data from China hit asset prices globally, Bitcoin Magazine spoke to a number of experts to assess the impact on the price of bitcoin.

Since its introduction in 2009, soon after the outbreak of the Great Recession, bitcoin has been championed as a more reliable store of long-term value than fiat money given bitcoin’s capped supply and the continued printing of fiat currencies by various central banks, which many fear will continue to cause financial crises across the globe.

However as the CBOE Volatility Index (VIX), often referred to as the ‘Fear Index’, recently trebled from 13.02 to 40.74, and global markets posted their worst week of the year, the U.S. dollar price of a bitcoin fell almost 20 percent from $256.98 to $209.13, suggesting investors are yet to be convinced of the investment case for bitcoin in times of economic turmoil.

“World markets are in commotion with the next leg in The Great Credit Contraction coming from Greece, Puerto Rico, China and anticipated Fed rate hikes despite a strengthening dollar,” Bitcoin investor Trace Mayer explained in an email to Bitcoin Magazine. Mayer believes that while it offers “a potential solution to this intractable global problem … (bitcoin) is not currently viewed as such by the majority of the investment community.

P. Bart Stephens, co-founder and managing partner of Blockchain Capital LLC, believes it is too early in the evolution of Bitcoin for it to be considered a safe haven for investors in times of panic.

“The recent drop in global stock prices is being driven by macro-economic factors …  namely, the slowing Chinese economy and Chinese policymakers’ quixotic responses to stock market volatility,” he said. “This puts investors in ‘risk off’ mode and causes a flight to safety”.

Furthermore, Stephens argued, at roughly $3 billion, the entire Bitcoin market is about the size of one small cap tech stock and therefore a small amount of selling in the Bitcoin market can cause dramatic moves in price. As a result, “Bitcoin is still seen as a high-risk investment,” he said.

David Ripley at digital wallet provider Glidera believes it is difficult to predict how weakening markets might affect the Bitcoin ecosystem: “On one hand, a downturn may lead individuals to feel they have less money available to obtain an alternative investment such as Bitcoin. On the other hand, some individuals may actually view Bitcoin as a better alternative investment to the traditional economic system, which could be facing challenging times”, he said

Prominent Bitcoin investor Roger Ver believes that the fall in the price of Bitcoin might even be a symptom of improving adoption.

“I think the price has dropped because people can now spend bitcoins at tens of thousands of locations, but most of the merchants are converting it to their local currency”, Ver told Bitcoin Magazine. “Bitcoin wasn’t (previously) spendable at many places, but more people were just holding it as a speculative instrument.”

Ver’s comments echoed those made by Tim Draper of Draper Fisher Jurvetson that the bitcoin price was bound to come under short-term pressure as miners get more bitcoin, causing selling pressure and less demand to buy as the use cases evolve.

Stephens agrees that the near-term might see further weakness in the bitcoin price.

“Bitcoin is in a bear market and has been for almost two years. … More recently this summer, the weakness in the price is due to the divisions in the Bitcoin development community”, he said. “Markets, and this includes bitcoin, dislike uncertainty”.

However, looking further ahead, Stephens is more buoyant.

“Over the intermediate to long term, we think bitcoin will perform very well, especially in a macro-economic environment characterized by fiat currency wars and currency volatility”, he said.

Despite the concerns around the short-term outlook, the Bitcoin community appears unanimous in its optimism for the longer-term prospects for the digital currency.

“Every time we are reminded of the difficulty of central banks and governments trying to manage currencies, economies or markets, we are reminded of the potential value of an alternative, truly free-market approach to currency and financial transactions,” said Ed Boyle, CEO at payments processing platform Blade Payments.

“Large negative stock market swings remind everyone that volatility is not limited to bitcoin,” Boyle continued. “To the extent that Bitcoin transactions continue to grow as strongly as they have been … bitcoin itself will become more and more stable and more and more valuable.”

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Leading Bitcoin Startups Integrate Vogogo’s Risk Management Platform

This week, Vogogo announced in its second-quarter financial statements that leading Bitcoin companies, including BitPay, ChangeTip, Genesis Global Trading and Zinger, have integrated Vogogo’s risk management/compliance products onto their platforms.

Vogogo’s services include customer verification, anti-money laundering and counter-terrorism finance compliance reporting, payment and rules engine and fraud mitigation. Global bitcoin payment services provider BitPay has integrated Vogogo’s AML-CTF global compliance, which validates users against global watch lists and protects the platform from money laundering attempts with advanced analytics and decision-making technology.

“We are seeing significant interest in our risk-management services and payment services from alternative markets,” said Vogogo CEO Geoff Gordon. “Capturing those opportunities will help us drive revenue while we continue to move forward with our plan to be the dominant provider of risk management and payment processing services to the cryptocurrency industry. We are huge believers in blockchain technologies and we aim to play a significant role in anchoring that industry for a long time to come.”

Vogogo also has integrated their compliance technologies onto global bitcoin exchange platform Kraken, as a part of its expansion across Canada.

“We see a lot of opportunity for Kraken in Canada, and we’re counting on Vogogo’s expertise in risk management and payment processing to make it possible for Canadians to move their dollars safely and efficiently to and from Kraken,” announced Kraken CEO Jesse Powell.


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