It is a public secret that most cryptocurrency exchanges don’t have the infrastructure in place to cope with growing user demand. Kraken is a prime example of this, and Coinbase experienced some major issues this week as well. Surprisingly, Bitcoin ATMs are not immune to these problems either. Two such machines in Singapore simply stopped working recently as there was too much network congestion to properly process transactions.
Although the public is still divided on the usefulness of Bitcoin ATMs, they certainly make it easier and more convenient to purchase various cryptocurrencies with cash. Moreover, these machines look and feel like regular bank ATMs, which only makes them more attractive to the general public. So far, these machines have seen some degree of success in the US, South America, and even Singapore.
Unfortunately, two machines in Singapore experienced serious problems last week. They crashed last Friday, simply because they couldn’t sell BTC for a total of three days straight. According to the operator, Bitcoin network congestion was to blame for this development. Most cryptocurrency users are well aware that the Bitcoin network charges high fees and experienced a massive backlog late last week.
Both machines, located at Hong Lim Complex and Tiong Bahru Plaza, were eventually brought back online and their services resumed. However, the Bitcoin price underwent some big changes in recent days, and people looking to use the machines to purchase cryptocurrency were not too amused. Buying Bitcoin is on a lot of people’s minds right now, and if the means to do so simply can’t keep up with consumer demand, a problem will arise pretty quickly.
It is evident the current Bitcoin craze is creating a lot of excitement. Sadly, there is no company capable of doing anything when the Bitcoin network gets congested. Bitcoin ATMs rely on liquidity from third-party providers, yet if those companies can’t send the funds to users quickly enough, ATM purchases can’t be completed. No one will wait several hours before their transaction is confirmed on the blockchain, nor should they have to. After all, Bitcoin should be well beyond such growing pains by now.
Considering that Singapore only has three Bitcoin ATMs at this point in time, seeing two of them become unusable is pretty worrisome. The one working machine suddenly became a lot more popular, and its operator seemed to have no issues whatsoever. It all depends on how much money is kept in reserve to deal with times of high demand. Purchasing Bitcoin from an ATM is always subject to certain limits, yet demand can still outweigh availability pretty easily. That’s especially true as the Bitcoin price continues to soar to new heights.
The issues plaguing the Bitcoin network are not new whatsoever. Despite the activation of Segregated Witness, no real improvements have been recorded in terms of lower fees or higher transaction output. This has caused a lot of problems for exchanges, service providers, and ATM operators. It is evident Bitcoin is not suited for fast transactions in its current form. When the Lightning Network launches, this will all hopefully become a thing of the past. For now, issues like these are normal and we will have to deal with setbacks as they come.
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