With the pandemic resulting in the loss of plenty of jobs from the market and employment hitting new lows, investing in cryptocurrency has become the new trend everyone has hopped on to, to survive in the very competitive world.
Bitcoin ATM was charging a minimal transaction fee right from the start of its existence which has kept increasing with the growing number of Bitcoin users. In fact, the fee that is being charged has been shooing away newcomers and keeping the current investors in a state of dilemma on whether they should even make as many transactions as they wish to.
Let us first understand the concept of the fee that is being charged.
What are Bitcoin ATM fees?
The fee that is being charged at the Bitcoin ATMs is also known as a miner’s fee. Some other names that this fee is known by are network fee, transaction fee, or just Bitcoin fee. The fee that is charged ensures that the transaction that is being conducted is done in the safest way possible into the blockchain.
It is important for the transactions to be verified and processed and hence this fee helps ensure it. On completing this, the miners are provided with Bitcoin, and transactions are added to the block after it has been verified. Below are mentioned a few reasons why the Bitcoin ATM fees are high.
Popular demand
News on Bitcoin is one that keeps making the headlines more often than not. In fact, it has become so high in popularity that the number of new investors willing to invest their money in Bitcoin has them standing in long queues.
Additionally, the market capitalization of Bitcoin just seems to be increasing from time to time. Which is, in turn, increasing the number of transactions that are being made as well. With all of these up and coming trends Bitcoin has even entered the affiliate marketing space. You can Go URL to check it out and jump on-board to reap the benefits.
Limited storage space in a Block
The amount of transactions that can comfortably adjust itself in a block is just 1MB. This is quite a small value of storage and hence would result in a lot of transactions to be made in order to sell or buy cryptocurrency.
Thus, every investor wishes their transaction to be considered, due to which increasing the price of the mining fee would be the only solution to keep this overpopulation of transactions in check. In fact, one of the reasons for the fluctuation of mining fees is due to the congestion of transactions.
Compliance Costs
The Compliance involved with Bitcoin ATMs is at a higher level considering the fact that a lot of cyber laws are to be considered as monitoring is not done manually but via networks. Policies and procedures are to be implemented by the respective departments based on secrecy acts put forth by financial institutions. Such rules enable cybercrimes, as well as money laundering, can be avoided. Hiring a compliance team to look into these needs is mandatory.
Rent
Though rent may not be a major contributor of expenses to the company, investing in a Bitcoin ATM could be something very expensive as it is still in its infancy stage. The location at which it is built charges the space it occupies by subleasing it to them. The cost of rent varies from location to location and can mostly be found in areas where the population levels are high. Some areas where these ATMs can be found are gas stations, grocery stores, and supermarkets.
Easier transaction
Developing a system where transactions happen at a faster as well as safer rate does not come at a cheap rate. Thus service charges help in making this possible. The reason why people are invested in cryptocurrency is due to the 2 previously mentioned factors. Hence, getting these two needs tended to at a slightly higher cost makes the system a fair one and not one that is out there to get your money. In order to maintain a balance in the system where the business is scoring profits, this is mandatory.
New to the market
When comparing the number of traditional ATMs with the number of Bitcoin ATMs, the former outnumber the latter by a large value. Due to the few numbers of such ATMs as well as them holding the benefit of rarity, the fees on transactions are charged accordingly.
Though it may seem that the owners of such machines are in favor, in the case of any vandalism or issues with the machines, they would have to shell out a huge figure to get these machines fixed.
Bitcoin ATMs are private
Bitcoin ATMs are not owned by the governments of the respective countries but are in the hands of huge private bodies that are in the game to make money. Private bodies in all walks of life are known to charge higher fees as opposed to the services offered by public entities.
The cryptocurrency industry is a free market where the rules are limited and an investor or company can make as much money as they want in the process of investing. This also means that there isn’t any rule yet that has set a certain bar on what the percentage of the miner’s fee can touch.
Summing It Up
Bitcoin at some point in time is predicted to have the potential of being able to replace traditional currency. Thus investing in Bitcoin at a time when the fee is low is some advice that various professional investors give.
The reasons behind the fluctuation in the miner’s fee have also been discussed and a few bucks can be saved if the investment is done at the right time. With that, we hope the reasons why Bitcoin ATM fees are high and what factors decide the cost of the mining fee.
