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How a Boston start-up became the world's largest network of bitcoin ATMs, cashiers and kiosks

At a time when buying bitcoin was full of friction, Chris Yim and Kyle Powers saw opportunity. Today, their startup LibertyX boasts the largest network of bitcoin ATMs, cashiers and kiosks in the world.

How a Boston start-up became the world's largest network of bitcoin ATMs, cashiers and kiosksLibertyX Cofounder and CEO Chris Yim. Photo provided.


| by Amy Castor — Editor, Networld Media Group

Buying bitcoin today is a fairly straightforward process, but go back six or seven years, and the options were limited. The biggest bitcoin exchange at the time, Mt. Gox, was in Tokyo, and you had to wire cash there to set up an account, a process that took days. 

At a time when buying bitcoin was fraught with risk — Mt. Gox went belly up in early 2014, leaving its customers empty handed — Chris Yim and Kyle Powers saw opportunity. Today, their Boston-based startup LibertyX boasts the largest network of bitcoin ATMs, cashiers and kiosks in the world. In July, it surpassed 1,000 bitcoin ATM machines in its network.

Yim, who is also the firm's CEO, recalls how the whole venture started. He recently met with ATM Marketplace at a coffee shop in Harvard Square to share the story.

Down the rabbit hole

It was summer 2013, and Yim had just moved to Philadelphia to start an MBA program at the Wharton School of Business when he first tumbled down the bitcoin rabbit hole. He was drawn to the idea of digital money and found himself talking about it incessantly. 

Fortunately, there was someone who would listen. Powers, a classmate, shared his enthusiasm for the digital money, and a friendship blossomed. Eager to learn more about bitcoin, the two realized the next step was getting their hands on some. 

They decided to go through a service called LocalBitcoins, which matches sellers and buyers. The only problem: you had to meet in person to do an actual cash exchange. Alternatively, you could send the cash, and hope the seller would send you the bitcoin, but that was a bigger gamble then the two were willing to take.

After a lot of screening, Yim and Powers located a potential seller and set up a meeting at a cafe in West Philly. Despite their concerns, everything went smoothly, and 20 minutes later, they had their first bitcoin. Still, it was an "aha moment" for the pair, who would later drop out of Wharton to focus solely on their new business.  

"I realized, man, this is so much friction for what really should be a very simple transaction," Yim said.

The two began brainstorming ways to make the process of buying bitcoin easier and landed on an ATM-like model as the best option. 

They ended up buying a kiosk from a company called Lamassu and repurposing it into a bitcoin ATM.

"Essentially it's a bank-grade vault with a tablet attached to it, a Raspberry Pi computer and then some type of Internet connection," Yim said in describing the early contraption.

On Feb. 19, 2014, the pair booted up the machine in Boston's busy South Station near the door out to train track #6, and Liberty Teller was off and running. Later in the year, the company would officially rebrand to LibertyX.

'We were first'

LibertyX missed launching the world's first bitcoin ATM by several months. Lamassu had already established the first bitcoin ATM at a Waves coffee shop in Vancouver in October 2013. The machine was operated by Las Vegas-based Robocoin (no longer around) and Vancouver-based Bitcoiniacs. 

Technically, the first bitcoin ATM in the U.S. launched a day before LibertyX made its debut. Eric Stromberg and his venture Enchanted Bitcoins went online with a bitcoin kiosk on Feb. 18, 2014, in a cigar bar in Albuquerque, New Mexico. But the machine was yanked 30 days later. 

For that reason, Yim claims his was the first in the U.S.

"We were the first," he argued. "Eric put one of his personal machines in a cigar bar and tried to claim they were first. It wasn't accessible to the public, which is why it was pulled shortly thereafter." 

Nevertheless, LibertyX's bitcoin kiosk in South Station did well, though it wasn't fully self-service. Because they were not allowed to secure the machine, Yim and Powers had to stand by it for every hour it was in operation, or risk someone running off with it. 

In the first month of operation, they saw roughly 1,000 transactions. They made 5% on top of every transaction, and six months later, they added three more kiosks to their budding business — one near Harvard University, one near MIT and another at South Station.  

Mainly they sold personal inventory, buying more bitcoin when needed it via over-the-counter exchanges. Riding bitcoin's wild rollercoaster of volatility is a challenge for any bitcoin business. The price of Bitcoin peaked at around $1,200 in November 2013, but continued to drop throughout 2014.

"I just remember when we started our business being in one of the longest bitcoin bear cycles for a while," Yim said.

It wasn't until late 2017 that bitcoin would soar to an all time peak of nearly $20,000. Today it's around $8,800.

Scaling the business

With four machines operating, LibertyX faced a new problem. While its founders saw plenty of demand for bitcoin, the kiosks were expensive — upward of $10,000 to buy and build. That's when Yim and Powers saw an opportunity to build a solution that was entirely buy-based, so that anyone with a retail footprint could sell bitcoin. 

"That was the second 'aha' moment for us," Yim said. "Why do you need to spend $10,000 to get a location to sell bitcoin when you have underutilized cashiers and brick-and-mortar stores that are dying for customers?"

So in 2015, Yim and Powers developed their own web-based software platform that lets local stores offer LibertyX services as part of their payment services, and they sold off their original Liberty Teller kiosks to bitcoin ATM maker Coin Outlet. 

For the consumer, the LibertyX process works something like this: You download the LibertyX app, set up an account and provide a bitcoin address. To set up an account, Yim said LibertyX requires the same information that you would provide when opening a bank account (name, phone number, address, birth date), but overall, LibertyX takes a conservative approach on compliance and asks for more information than most bitcoin ATM operators. 

Once you decide how much bitcoin you want to buy, LibertyX issues you a six-digit order number, which you take to a cashier in the LibertyX network. Once the cashier confirms payment, LibertyX then sends you the bitcoin. In return, stores receive a convenience fee per transaction. This is different from bitcoin ATM operators who typically pay stores rent, much like in the traditional ATM model.

Moving to traditional ATMs

All along, Yim said LibertyX wanted to integrate with traditional ATMs but it wasn't until late 2018 that the startup finally finished "dotting i's and crossing t's" on an agreement with Genmega, an ATM manufacturer that controls nearly half of all the non-bank retail ATMs in the U.S. 

According to Yim, Genmega now has a default ATM setup built into its Windows operating system so that any Genmega operator can potentially sell bitcoin directly through the cash machines.  

Bitcoin buyers still need to set up an account on the LibertyX app, but now, instead of giving the order number to a cashier, they enter it into the ATM directly, and then pay using a debit card.

"That's the beauty of it. There's no funds in transit. It's all instant and the customer gets the bitcoin right away," Yim said.

Although LibertyX only operates in the U.S., Yim envisions a future where a bitcoin ATM, kiosk or cashier is located on every block. He believes that's what it will take for wide-scale adoption. 

"There's a lot of online websites and exchanges where you can buy bitcoin now, but a lot of them take upwards of 7-10 days for you to actually have the bitcoin in your wallet. And part of that's just how long it takes for an ACH bank transfer," Yim said.

He thinks that's too long to wait. Since many people are still skeptical about bitcoin, until the crypto is in their wallet, the process of buying bitcoin is often rid with anxiety, similar to when Yim and Powers bought their first bitcoin in a Philly cafe.

"Building trusted onramps is really important for getting people into crypto. And that's what we're really aiming to do," he said. 


Amy Castor

Amy Castor has more than 20 years of experience in journalism and mass communications. In the last several years, she has gotten particularly interested cryptocurrencies, blockchain technologies and other evolving forms of payment. Her work has appeared in consumer and trade publications throughout the U.S., including CoinDesk, Forbes, and Bitcoin Magazine. She is now the editor of ATMmarketplace.com and WorldofMoney.com

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