Bitcoin vending machines — ones that allow you to both withdraw cash from your Bitcoin account, and/or upload cash into your Bitcoin wallet — have been getting a lot of attention, especially as SXSW rolls on.
Our Steve Kovach just live Tweeted what it was like to use one. He was sorta neutral.
Meanwhile a recent Tweet from The Verge’s Adrian Jefferies alerted us to something we hadn’t really noticed: these machines are actually kind of expensive. She was able to purchase Bitcoin from the machine at $US689/coin, about $US50 above market rate (she only bought $US1 worth).
The only known, functional two-way Bitcoin ATM is manufactured by a Las Vegas-based company called Robocoin. They have four in the U.S., plus at least one in Canada.
We confirmed that the average transaction fee is 3-5% of the withdrawal amount.
The one in Vancouver actually costs 7%. Wired’s Bob McMillan actually did a story about how the owner had to hire a minder to ward off live dudes who’d trade their Bitcoin for next to nothing who’d taken up residence next to the machine.
There is another Bitcoin vending machine in Albuquerque that does not appear to charge a fee — but it’s one-way: Users can only insert cash into their virtual wallet.
Robocoin CEO Jordan Kelley told us this is actually cheaper than the fees on LocalBitcoin.com, which charge .0001-.0004 BTC, and much cheaper than the rate for a normal MoneyGram or Western Union remittance, which can climb up to 13%.
Kelley says you’re paying for peace of mind.
“We are more secure and more compliant, than meeting a guy at Starbucks,” he told us.
But it seems like all but the most ardent Bitcoin evangelist would be willing to throw down that much.