Bitcoin ATMs have emerged as one of the key technologies for bitcoin. These ATMs allow people to quickly and easily make deposits and withdrawals in bitcoin, at least in theory. In practice, building and implementing bitcoin ATMs have proven to be tricky.
The pioneer of bitcoin ATMs was Robocoin, a Canadian firm that launched the first functional bitcoin ATMs. Unfortunately for the firm, 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. Where there is a potential for profits and innovation new competitors will emerge. 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 under “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. A quick search of Robocoin’s website shows no mention of ATM machines, and it appears that the company is no longer focusing on hardware.
Unfortunately, it appears that some companies are stilled owed ATM machines or refunds stemming from their purchase of Robocoin ATM machines.
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. Of course delays for new and emerging technologies should be expected, but after a series of delays Bitcoin Solutions still hadn’t received its promised ATM machine.
Having lost patience and having found alternative ATM machines 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 is owed money, and the company was on schedule to deliver the rest of the refund.
The money never appeared, however, and Bitcoin Solutions has since been left on the hook with $10,000 dollars worth of money yet to be refunded. Bitcoin Solutions CEO Adam O’brien continued to contact Robocoin, but the last response from Robocoin’s management came this past 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. Robocoin, unfortunately, has not sold an ATM machine since this past October.
Interestingly, Robocoin threatened to take Bitcoin Solutions to court if it 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. Regardless, threatening a client who is owed and demanding a refund is a rather odd and aggressive step to make.
Besides Bitcoin Solutions, other companies have also reported delayed deliveries of promised ATM machines and have received defective hardware upon arrival.
Complicating matters, 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 that $25,000 is vital cash that can be used to invest in the future.
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