Photo: Times of Malta
An entrepreneur is already regretting his decision to install Malta’s first Bitcoin ATM, a mere month after launching it in Sliema.
The novel ATM in Blanche Huber Street allows people with eWallets on their smartphones to check their account balance and purchase bitcoin cryptocurrency at a 8% transaction fee by holding QR codes on their phones in front of the ATM.
Romanian entrepreneur Gabriel Cretu Torica was full of enthusiasm when launching the ATM last month, telling the Times it will allow people to obtain Bitcoin faster than they otherwise would be able to through an online trading platform.
However, he has now changed his tune dramatically and is accusing the Czech company he had purchased the ATM from of selling him a dud.
This is because the Sliema ATM has a particularly nasty glitch – if you order an amount of Bitcoin worth more than the amount of money in your eWallet, the ATM will eat all your money and not give you any Bitcoin.
A “transaction error” will show up on the screen leaving users with no other recourse than to call up Torica himself, who has let his personal mobile number on the ATM. Torica will then log into the system, check the transaction that would have taken place, and personally send Bitcoin to the client’s eWallet address.
However, this remedy has two major problems – it requires Torica to be on call 24/7, and the volatility of Bitcoin’s value means he would often have to purchase it at a higher rate than when the ATM transaction would have taken place, losing the entrepreneur money in the process.
“If someone gets a transaction error and comes to me the next day when the value of Bitcoin would have shot up, then I’d lose money. It’s a very bad business and many things still need to be fixed,” he said.
Torica is pinning most of the blame on General Bytes, the Czechia-based Bitcoin ATM production company he had purchased on for around €2,700.
“The company looks serious from its website but it’s actually a shit company, whose staff pretend to be busy producing ATMs all day. It’s the worst company I’ve ever dealt with,” he said.
He said he was on holiday recently when he received a message from General Bytes saying they had to close down their server for a few days because it had been hacked. After four days, the company changed the server but Torica couldn’t connect it to the ATM because he was on holiday.
“Setting up the ATM was a really stupid idea”
Gabriel Torica – founder of Malta’s first Bitcoin ATM
The ATM was left connected to the old server for two days before the server closed down and the ATM went offline, a state it is still in today. While the old server was shut down, Torica said a man “who sounded familiar” called him from a British number to tell me had tried to purchase Bitcoin but received a transaction error.
“I told him to send me a message with his eWallet address but the server was down so I couldn’t check whether the transaction had really taken place and whether this guy was telling the truth,” he said. “When I later checked the money in the ATM, I found out there was around €550 less than there should have been based on the transactions which should have taken place, meaning this guy had scammed me.”
Torica said he plans to put the ATM back online this weekend, but this time with new conditions. Essentially, he will receive a message whenever a transaction takes place, ask the client for their eWallet address, buy the Bitcoin himself, and forward it directly to the client’s account within an hour.
Doesn’t this defeat the entire purpose of the ATM though? Wouldn’t it be easier for people to simply buy Bitcoin online?
“Yes, there is no point of the ATM,” Torica says with a wry laugh. “I used to like the idea of Bitcoin but now i realise its volatility is a major problem. Setting up the ATM was a really stupid idea.”
New Bitcoin ATM on its way to Malta
Meanwhile, local Bitcoin start-up Ivaja has ordered its own Bitcoin ATM – partially through a crowdfunding campaign – and hopes to install it in Valletta or Sliema within the next month.
Unlike Torica’s ATM, Ivaja’s version will be a two-way machine, allowing people to both buy and sell Bitcoin through it.
Swedish co-founder Jonas Abrahamsson said he is confident his start-up’s version will be far more of a success than Torica’s, arguing he and fellow co-founder Lyon Siegmund, from Germany, have done their research properly.
“[Torica] went into the project without understanding anything about the Bitcoin business, he just ordered the ATM and installed it,” he told Lovin Malta. “If he didn’t know from the start about Bitcoin being volatile, then he shouldn’t have got into it in the first place. We understand the business, which is why we’re taking longer than he did to install it. We will ensure our machine always has Bitcoins in its account and make sure no customer ever orders Bitcoin without receiving it.”
He confirmed he will contact General Bytes – which Ivaja also purchased it from – to confirm whether the problem with Torica’s ATM is a glitch in the system or a result of Torica not setting it up correctly.