If you have enough capital behind you then a more easily scalable, and potentially more profitable way to set up a business involving bitcoins is by operating specialist bitcoin Automatic Teller Machines (ATMs) also known as ‘Bitcoin Teller Machines’ (BTM).
Fees charged by BTMs seem to start around the range of 5-10% per transaction, and in some cases there are a lot higher. Operators who manage to get their machines into the best locations often report a return on investment for their initial capital in less than a year. These machines do not take up a lot of space, so renting locations would not cost so much, but the cost of the machine and the cost of loading it with bitcoins can cost quite a bit.
There are a wide range of machines available to buy, and they usually allow you to set your own fees to the level you want. Some machines will also allow you to connect to a third-party exchange through an API in order to manage your currency risk by keeping your reserves of both BTC and your local fiat at a constant level.
Operate a Bitcoin Vending Machine
Running a bitcoin vending machine is much like running a traditional vending machine. The only difference is that the payment method is via bitcoins. One of the known limitations of vending machines is that many people simply don’t carry a lot of change around with them, and may not have the coins needed to make a purchase.
As the use of cash continues to decline this is likely to present an ever-expanding opportunity to replace coin systems with new machines capable of accepting alternative payment methods. Already there are machines available to purchase which accept both credit/debit cards and Bitcoin. You can buy a vending machine that accepts bitcoin and you would have started a good stream of passive income.
Start a bitcoin dropshipping business
Here, the seller usually buys bitcoins when needed, and immediately transfers them to the buyer. This is almost what happens in Bitcoin ATMs and with LocalBitcoins, where people who want bitocoins lack the bank account/KYC/AML qualifications to buy them themselves. So they get somebody else to buy the bitcoins and sell them along to them, usual with a commission added in. Drop shipping companies generally make use of a third-party service to facilitate bitcoin payments.
Start a bitcoin reseller business
If you already have a viable business in retail or if this is a sector you are thinking about going into, you may also like to consider reselling Bitcoin related products. A site called Prypto offers a way for retailers to sell Bitcoins in the form of scratch cards or vouchers.
This is perfect for adding to the counter of a local newsagent of Grocery Store, but can also be used by online businesses. There are many digital products unrelated to digital currency which have reseller programs. This is a great way to get into retail without a huge expenditure on buying stock, and making a product available for purchase with bitcoin may win you some business.
Become a bitcoin escrow Agent
If you have built up a name for yourself and your business as somebody that can be trusted, then you can use this trust as a launching pad to set yourself up as an escrow agent or agency. Generally, the role of an escrow agent is to arbitrate over disputes that may involve online purchases, freelance contracts, or other business and trade arrangements.
In becoming a bitcoin escrow agent, you get to hold transaction payment for the seller and the buyer pending when the transaction is completed. The payment is made to a bitcoin address which requires the signatures of the buyer, the seller and the escrow agent in order to send a transaction.
If there is no problem with the transaction, then the buyer and seller sign and payment is made, but if there is a problem then the escrow agent must choose whether to sign the payment or the refund. You can create a profile on websites like Bitrated to promote your services as an escrow agent.
An oracle is, simply put, a translator for information provided by an outside platform. Oracles provide the necessary data to trigger smart contracts to execute when the original terms of the contract are met. These conditions could be anything associated with the smart contract – temperature, payment completion, price changes, etc.
The marketplace for these highly specialized middleware software models is growing rapidly, and as new ways to utilize Blockchain technology are being conceived of every day, the demand will only increase. Oracles publish information over the blockchain which can be used for betting, for financial derivatives, or for smart contracts.
This is a very profitable bitcoin related business one can start, but you have to be very knowledgeable in bitcoin and blockchain programming before you can make any headway in this area.