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Making ATM Bitcoin Payments via Lightning Network Is Becoming a Reality

Developer and researcher Felix Weis successfully executed, as a proof-of-concept, the world’s first ATM Bitcoin transaction on the Lightning Network.


World’s First Lightning-enabled Bitcoin ATM ‘Worked Fine’

On March 31, 2019, Weis publicly demonstrated a transaction via Lightning Network at a bitcoin ATM, during the Lightning Hackday, in Hong Kong, as shown in the video below.

Later, Weis described the transaction as:

Just a proof of concept ‘top up your existing channel.’ Lots of bugs but two different mobile wallets worked fine.

Bitcoin Lightning Network Capacity Rises Over 1,000 BTC

The crypto industry is becoming increasingly enthusiastic about the Lightning Network because it offers to drastically lower BTC’s transaction fees while making it possible to execute near-instant transactions.

Moreover, the demonstration of making ATM Bitcoin payments over the Lightning Network comes when Weiss Crypto Ratings has just upgraded Bitcoin from a “C-” to a “B-” (good) because its technology had dramatically improved.

Weiss highlighted these conclusions in a comprehensive report on the crypto market entitled “Dark Shadows with a Bright Future, ” published in March 2019.

Specifically, the Weiss evaluation considered four factors: adoption rate, technology, risk, and reward. And, it highlighted the effect of the advent of the Lightning Network in the upgrade, as follows,

Bitcoin has been upgraded with the roll-out of its Lightning Network and is the best positioned to become a popular store of value for savers and investors.

The Lightning Network is a decentralized system where participants can implement trustless micropayment channels to perform one or multiple payment transactions off-blockchain.

These channels reside off the Bitcoin blockchain. Transactions occur between these channels. Upon completion, transactions are transmitted, as a single transaction, to the blockchain. Then, the payment channel is closed, and transactions are transcribed onto the blockchain.

Therefore, regardless of the number of transactions performed, the BTC blockchain is accessed twice, at the opening of the channel and the closing of the channel.

The implementation of Lightning Network nodes continues to gain momentum. As of this writing, according to 1ML, a Lightning Network monitoring website, the network now boasts 7,744 nodes and 39,129 channels. And the network capacity reaches over 1,059 BTC.

Will Bitcoin ATMs use Lightning Network to cut costs in the future? Let us know in the comments below!


Images courtesy of  via Twitter/@bitcoinorghk, Weiss Crypto Ratings, Shutterstock

The Rundown

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Dubai’s First Bitcoin ATM Let’s You Buy With Cash, No ID

If you’re in the UAE and want to buy some bitcoin, you can do so without KYC from the first Bitcoin ATM in Dubai. Don’t get too excited, though. You can’t make withdrawals yet–and you’ll need to show ID when you do.


The First Bitcoin ATM in Dubai

The good news is that Bitcoin ATMs are gaining traction around the world. Now there’s an operational machine in Dubai hotel and wellness center Rixos Premium Dubai JBR. However, the functionality of the machine is pretty limited for now.

For those looking to venture into the world of digital currency without having to undergo KYC or even show an ID Card, this is the path forward.

Users can simply purchase bitcoin with cash, no questions asked. They can’t sell them though, not through this machine anyhow. According to Anhad Dhingra CEO of Amhora, the company that owns the ATM, that option will be available in a couple of months.

Not All Good News for Anonymous Bitcoin Buyers

If you thought that using a fat wad of cash to purchase bitcoin was a great way to stay anonymous, think again. Remember, that you’ll need some sort of wallet to send your bitcoins to and an existing exchange to sell them afterwards. 

Moreover, when the Dubai Bitcoin ATM rolls out the sell option, users will have to swipe their Emirates ID card or passport.

Buy Bitcoin at Just Five Percent Commission

Amhora is fully licensed by the Department of Economic Development and will charge users a five percent commission on the total purchase. While this may sound steep to regular users who shrink from Coinbase and its high fees, the average Bitcoin ATM charges around 7.5 percent.

Dhingra enthused:

The commission is very attractive because you can buy bitcoins instantly. Otherwise people have to go through a number of procedures which take a lot of time. At this kiosk, you just insert cash and you get bitcoins instantly. It is possible to purchase bitcoins through banking platforms and debit cards already but since we accept cash, it is very different.

While there have been several prototype projects for Bitcoin ATMs, none of them is currently functioning. This makes Amhora’s ATM the first of its kind in the emirate.

Have you ever bought bitcoin from a BTM? Share your experiences below!


Images courtesy of Shutterstock

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Calgary Police Seek Information About Suspects in $145k Bitcoin ATM Scam

An unnamed Bitcoin ATM provider serving the Canadian market was scammed last year across a number of the nation’s cities. Police are now seeking information regarding four suspects believed to be involved in the fraud.

The four men are believed to have taken around US$145,000 from the machines over the course of 10 days in 2018. According to reports, this was made possible by quickly cancelling transactions before the Bitcoin ATMs targeted could process them.

Four Suspects Hit Bitcoin ATMs Over 10 Days Across Multiple Cities

Calgary police are looking for help identifying four individuals suspected of being involved in the defrauding of a series of Bitcoin ATMs across cities in Canada. The four suspects are believed to have made a total of 112 fraudulent transactions in Calgary, Toronto, Ottawa, Winnipeg, Hamilton, Sherwood Park, and other locations. The total amount generated by the scam is just over US$145,000.

The dates of all the transactions fall between September 16, 2018, and September 26, 2018. According to a report in Canadian news publication CBC, just less than half the attacks on Bitcoin ATMs took place in Calgary.

A Bitcoin ATM is the general name given to a machine, often found in a place of business, that accepts fiat deposits in exchange for Bitcoin. In many but not all cases, users can also sell Bitcoin to the machine in exchange for local currency. The popularity of Bitcoin ATMs has exploded in recent years with many more units appearing worldwide – particularly in large US cities.

The four suspects in the Canadian Bitcoin ATM scam are believed to have figured out of a way to cancel transactions before they were fully processed by the provider of the units. This essentially gave them the value of the deposit in both crypto and fiat.

CCTV footage of the four suspects has been provided by Calgary police, with assistance from authorities in Ontario and Manitoba. The pictures were published in CBC, along with a statement from the Calgary police that speculated that the four suspects have “deep knowledge or interest in cryptocurrency, Bitcoin, and/or blockchain technology.”

Below is an image of each of the four suspects:

Each of the four suspects in the Bitcoin ATM fraud is believed to have targeted a different area.

According to reports, each of the four suspected of defrauding Canadian Bitcoin ATMs targeted a different area. The left-most individual in the above image is believed to have focused on Toronto, Montreal, Ottawa, and Hamilton. The next two are thought to have targeted Calgary and Winnipeg respectively. Finally, the right-most face belongs to the individual suspected of defrauding Bitcoin ATMs in Sherwood Park.

The Calgary Police Service is being assisted in its investigation by authorities from Toronto, Hamilton, Winnipeg, and Halton. The CPS requests that anyone with any information that could lead to the identification of one or more of the individuals pictured above contact the force’s non-emergency phone number on +1-403-266-1234, or to submit information through Calgary Crime Stoppers. 

Related Reading: Are Bitcoin ATMs Driving Adoption, Criminality, or Consumerism?

Featured Images from CPS and Shutterstock.

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Philippines’ Central Bank Helps Launch Bitcoin ATM

One of the largest banks in the Philippines, Union Bank, has collaborated with the country’s central bank to launch a Bitcoin ATM, allowing customers to both buy and sell bitcoin for cash.


Union Bank Launches Its First Bitcoin ATM

Union Bank in the Philippines has launched its very first two-way Bitcoin ATM, according to a release.

The machine, puportedly located at the bank’s headquarters in Pasig City, allows customers to purchase and sell cryptocurrencies using fiat.

Union Bank has said that this has become possible thanks to its collaboration with the country’s central bank, Bangko Sentral Philipinas. The official release states:

In the bank’s continued quest to cater to the evolving needs and tastes of customers, including clients who use virtual currency, the ATM will provide these clients an alternative channel to convert their pesos to virtual currency and vice versa.

On January 17th, Twitter user Mike Abundo posted a picture of the machine with a note on it that it’s “coming soon.” He revealed that its located in the bank’s main branch, which, according to their official website, is in Pasig City.

This is not Union Bank’s first involvement with Bitcoin. In May last year, Bitcoinist reported that the bank ran Bitcoin miners at a local conference in order to “experiment and explore how it works.”

Cryptocurrency Regulations in the Philippines

The positions of the country’s regulators on Bitcoin has traditionally been rather favorable.

philippines

In 2017, the central bank of the Philippines, Bankgo Sentral, issued a circular which recognized Bitcoin has “potential to revolutionize.”

[…] recognizes that Virtual Currency (VC) systems have the potential to revolutionize delivery of financial services, particularly for payments and remittance, in view of their ability to provide faster and more economical transfer of funds, both domestic and international, and may further support financial inclusion.

The circular also requires cryptocurrency exchanges to be registered with the central bank as companies for remittance and transfer. They also have to provide the needed safeguards in order to prevent risks associated with cryptocurrencies, including money laundering, terrorist financing, technology management, and so forth.

In addition, the country also allowed 10 cryptocurrency companies to operate within its economic zone, hence taking advantage of certain tax benefits.

What do you think of the first Bitcoin ATM being launched in the Philippines? Don’t hesitate to let us know in the commnets below!


Images courtesy of Shutterstock 

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NYDFS Grants BitLicense to Third Bitcoin ATM Operator

Another bitcoin ATM operator has received one of New York’s coveted BitLicenses.

Cottonwood Vending LLC was granted one of the virtual currency licenses Thursday, the New York Department of Financial Services announced on Twitter, joining a select group of fewer than 20 crypto companies to receive regulatory approval to operate within the Empire State.

The agency has been ramping up its awarding of its virtual currency licenses recently, with three awarded in January 2019 alone, compared to only one being granted each in 2015 and 2016, and two in 2017.

Coinsource was the first bitcoin ATM operator to receive the license, which was awarded in November 2017 after a three-year application process. LibertyX joined it earlier this month, announcing that it would allow individuals to purchase bitcoin using debit cards at traditional ATMs.

Automated kiosks for buying bitcoin in the U.S. are becoming increasingly popular, with money changer Coinstar announcing earlier this month that it would enable such purchases in a number of states. While at launch, customers can only purchase bitcoin at specific stores in California, Texas and Washington, however, the company plans to expand to other parts of the country going forward.

In an email, Cottonwood CEO and founder Aniello Zampella told CoinDesk that the general public can purchase bitcoin using cash at any of the company’s machines. Select machines will also allow customers to sell bitcoin for physical cash.

“We are delighted to continue to offer the opportunity of trading bitcoin at our many locations to all those who sign up with us,” Zampella said, adding:

“It is a monumental personal achievement of mine, and also acknowledges all the hard work and tireless efforts of my support & compliance staff over the years to maintain a 24/7 safe, secure, and reliable financial service. This license will also allow us to continue to serve the historically underserved, and all New Yorkers, for many more years to come!”

Editor’s note: This article has been updated with comments from Cottonwood CEO Aniello Zampella.

ATM image via Shutterstock