Lightning-enabled Bitcoin ATMs promise to offer instant transaction support and a significant cut in cost from traditional crypto ATMs.
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The Australian city of Coolangatta has gotten its first Bitcoin ATM with integrated Lightning Network capabilities. The new ATM has been installed at The Strand shopping center in Coolangatta and is now available for use by the public.
A Bitcoin Lightning ATM works quite similarly to traditional Bitcoin ATMs but saves significant time because of the instant transaction capabilities of the layer-2 Lightning solution. It also allows for purchasing very small amounts of Bitcoin (BTC), mostly in satoshis — the lowest denomination of Bitcoin, with 1 satoshi equal to 0.00000001 BTC.
At the moment, cryptocurrency ATMs settle transactions on the blockchain directly, but this has restrictions of its own. For instance, operators had to adapt to batching transactions when miner fees on the Bitcoin network considerably increased between 2017 and 2018.
In practice, this means that even though a user purchases BTC via an ATM, it is not immediately transmitted to them. Operators have processes in place that wait for other ATM network users to utilize the machines before grouping and sending out transactions for several users at once in one bulk transaction. This problem can be resolved to a significant extent with the help of the Lightning Network.
Using Lightning, the transaction becomes immediate because the operator doesn’t need to batch the funds — as soon as cash is inserted, the user receives payment via the Lightning Network. While there is still a debate over whether the fees will be significantly reduced, they will likely be lower than an on-chain payment.
The recent installment of the Lightning-enabled Bitcoin ATM in Australia comes in the wake of the country overtaking El Salvador to become the fourth-largest Bitcoin ATM hub in the world. Australia had 216 ATMs stepping into 2023.
According to Coin ATM Radar, the total number of crypto ATMs worldwide is currently 38,602, out of which 6,071 ATMs were installed in 2022 alone.