January 3, 2023 — Coolangatta, an Australian city, has received its first Bitcoin ATM, complete with integrated Lightning Network functionality. The new automated teller machine was installed at The Strand shopping center and is currently available to the general public.
A Bitcoin Lightning ATM functions quite in the same way that traditional Bitcoin ATMs do, but the new version saves a significant amount of time due to the instantaneous transaction capability of layer-2 Lightning. It further permits the purchase of smaller amounts of Bitcoin, primarily in Satoshi (sats), which are the lowest denomination of BTC (one Satoshi is equivalent to 0.00000001 BTC).
At this time, standard cryptocurrency ATMs reconcile transactions directly on the blockchain. This has limitations. For example, operators needed to adjust to the batching of transactions at a time when mining fees on the Bitcoin network substantially increased between the years of 2017 and 2018.
This suggests that even when someone buys Bitcoin by means of an ATM, the funds are not instantly sent to them. The operator has steps in place that require waiting for other ATM network users to use the machines before grouping together and dispatching transactions to multiple users all at once in just one transaction. This issue can be remedied to a considerable extent with the assistance of the Lightning Network.
Using Lightning Network, transactions become instant because the operator has no need for grouping the funds together. As soon as money is inserted, the user is provided with payment through the Lightning Network. While there remains some debate over whether or not the associated fees would be significantly reduced, they are likely to be lower than those linked to on-chain payments.
The recent installment of the Lightning Network-enabled Bitcoin ATM in Australia comes as Australia has just overtaken El Salvador as having the fourth-largest number of Bitcoin ATMs in the world. Australia had 216 ATM installations moving into the new year. The overall number of cryptocurrency automated teller machines globally is 38,602. Of these, 6,071 were installed during 2022 alone.