Last updated on January 2nd, 2018 at 12:00 am
Bitcoin ATMs have emerged as one of the key technologies for Bitcoin. In theory, these ATMs allow people to quickly and easily make deposits and withdrawals using cryptocurrency. In practice, effectively building and implementing Bitcoin ATMs have proven to be tricky tasks.
The pioneer of Bitcoin ATMs was Robocoin, a Canadian firm that launched the first functional cryptocurrency devices in 2013. But cheaper, smaller and more efficient alternatives have since emerged and the Bitcoin ATM market has become very competitive.
That’s how markets are supposed to work, of course. New competitors will emerge where there is a potential for profits and innovation. The best competitors will enter markets with technologies and methods that reduce costs, thus enabling them to deliver products or services to customers at a lower price.
Facing intense competition in the ATM market, Robocoin has rebranded itself as ‘Romit’ and shifted its focus away from ATM machines and towards operating as a full-service banking-like company with a mission to disrupt global remittances. Today, a quick search on Robocoin’s website shows no mention of ATM machines and it appears that the company is no longer focusing on hardware.
[tweet_box design=”default”]It appears that some of the company’s clients are still owed ATM machines or refunds stemming from their purchase of Robocoin ATM machines.[/tweet_box]
Back in January of 2014, Bitcoin Solutions ordered an ATM from Robocoin, but the machine was never delivered. The ATM was supposed to ship February 7th, but didn’t. Although it takes time to deliver a new and emerging product, after a series of delays Bitcoin Solutions still hadn’t received its promised ATM machine.
Having lost patience and having found alternative ATM manufacturers that were able to deliver on their promise, Bitcoin Solutions demanded a refund. Robocoin actually agreed, even though such refunds were against company policy. By March of 2015 Robocoin had refunded $15,000 of $25,000 and the company was on schedule to deliver the rest of the refund.
However, the money was never returned and Bitcoin Solutions has since been left on the hook with $10,000 yet to be refunded. Bitcoin Solutions CEO Adam O’brien continued to contact Robocoin, but the last response from the company’s management only arrived a couple of months ago, in June.
It turns out that the refund itself was contingent on new hardware sales, meaning Robocoin wouldn’t be able to refund the money until revenue streams improved. The problem is that Robocoin has not sold an ATM machine since this past October.
Interestingly, Robocoin threatened to take Bitcoin Solutions to court if the latter went public with its grievances. According to Robocoin, the public disclosure of its problems would inhibit its efforts to raise funds through its Romit service.
Besides Bitcoin Solutions, other companies have also reported delayed deliveries of promised ATM machines and have received defective hardware upon arrival.
To complicate the matters further, most Bitcoin companies are still in the startup phase of their efforts. This means money can be tight and cashflow can be a problem. For an established banking service like Citigroup, $25,000 is a drop in a bucket. For Bitcoin Solutions and Robocoin, the same $25,000 is vital cash that can be used to invest in the future.