Published Oct, 29 2024

How Bitcoin Machines Are Becoming Gateways to DeFi

Bitcoin machines are more than just convenient; they’re your go-to entry point into the world of decentralized finance. But maybe we’re getting ahead of ourselves. The crypto world is vast and constantly changing. Decentralized finance (DeFi) is just one of the many islands of adventure for the crypto-curious. Unfortunately, Bitcoin wasn’t a part of the […]
A dramatic illustration of the Bitcoin logo centered in a bright yellow explosion or burst effect, surrounded by dark rocks and debris flying outward in a comic book style.

Bitcoin machines are more than just convenient; they’re your go-to entry point into the world of decentralized finance.

But maybe we’re getting ahead of ourselves.

The crypto world is vast and constantly changing. Decentralized finance (DeFi) is just one of the many islands of adventure for the crypto-curious. Unfortunately, Bitcoin wasn’t a part of the DeFi party for the longest time. 

Let’s unpack why that’s changing and how you can start your DeFi journey at a Bitcoin machine near you.

Bitcoin's DeFi Awakening

Bitcoin (BTC) is known as digital gold. Why? It shares many characteristics with the lustrous precious metal:

Another essential aspect they share is their limited utility beyond value storage. While gold does have some industrial uses, it’s fairly minuscule compared to its value as an asset. 

BTC shares a similar reputation. For most, it’s a store of value. 

But that’s quickly changing. In the last few years, developers working on the Bitcoin network have reshaped what’s possible for the world’s most popular cryptocurrency. A slew of innovations has opened up new opportunities for applications and other projects to build right on top of the BTC blockchain. 

One area that’s shaken up the BTC community is the introduction of decentralized finance on Bitcoin. Known as Bitcoin DeFi (BTCFi), this emerging sector of the greater Bitcoin ecosystem is already taking shape.  

What Is Decentralized Finance (DeFi)?

We covered this topic in a blog all about decentralized finance, but here’s a condensed recap.

DeFi aims to recreate traditional financial services in a decentralized way. This gives people more control over their money and financial activities. If you can think of a service that a bank or other financial institution offers, there’s a good chance a DeFi alternative exists.

Here are a few examples of DeFi services:

That’s just scratching the surface. In 2022, the global DeFi market was valued at $55 billion* (as mentioned on fortunebusinessinsights.com). That number is expected to eclipse $337 billion by 2030* (as mentioned on fortunebusinessinsights.com). 

Most of the DeFi action happens on blockchains with programmable smart contract functionality. That means you can easily build apps that work onchain. Historically, that’s been a bit of a roadblock for DeFi on Bitcoin. 

In its original form, Bitcoin wasn’t built for this type of developer activity. But, with recent innovations to the BTC ecosystem, like the Taproot upgrade, that’s changing. 

Why DeFi Belongs on the Original Blockchain

So, if other chains already have established DeFi ecosystems, why would bringing this activity to the BTC blockchain make sense?

Ethereum, the current king of DeFi, has over 1,000 protocols and around $44 billion in locked value* (according to defillama.com). Tron and Solana, the second and third blockchain contenders, together only account for about a quarter of the DeFi value of Ethereum (also mentioned by defillama.com).

Bitcoin offers a few things these chains simply don’t. The main draw? Unparalleled security.

Not only is BTC the longest-running blockchain with robust security, but it also has the largest network of miners securing the network. This is great for proponents of decentralization. Moreover, it’s also hyper-resistant to 51% attacks* (read more about 51% attacks at mit.edu), a common type of attack on a blockchain system, due to its size and decentralization.

Bitcoin’s proof-of-work block validation mechanism is widely believed to be more secure, even if less efficient, than other popular mechanisms like Ethereum’s proof-of-stake. 

For DeFi, this robust security is a killer feature.

Ultimately, BTC’s security keeps people’s coins safe. Unlike traditional banks, with DeFi, there’s no central authority to provide insurance or reverse transactions if something goes wrong.

A security breach on a DeFi platform can be devastating.

If Bitcoin is the most secure blockchain, why settle for anything else for DeFi activity? Well, until recently, it simply wasn’t possible. These days, innovations like layer 2 solutions, BRC20, and side chains offer users access to DeFi applications built on the security of BTC.

It’s almost the perfect match. But how can you get in on the action?

Your DeFi Journey Begins Here: Why Bitcoin Machines Are Your Best First Step

Okay, so how can you get started on your own BTCFi journey?

You could begin your adventure using a crypto exchange. Unfortunately, there aren’t many ways to purchase BTC without a bank account using this method. Don’t you think if you’re trying to escape the clutches of traditional finance, you’d start somewhere else?

That’s where Bitcoin machines, also known as Bitcoin ATMs, come into the picture.

With Bitcoin machines, like Bitcoin Depot’s machines, you can easily turn your cash into BTC. That means no banks or intermediaries need to get involved. They represent a seamless entry point into the world of BTC and, in turn, the world of BTCFi. 

Additionally, unlike lengthy bank transfers, which can take days, Bitcoin machines offer instant access to BTC.

They give users a way to get involved in the emerging BTCFi space while staying decentralized.

Bitcoin Machines and the Future of Finance

As the Bitcoin DeFi ecosystem heats up, more and more users will flock to the OG blockchain for its unparalleled security.

But, to keep things decentralized, users should consider Bitcoin machines as the go-to on-ramp. 

Not only do they cut out intermediaries and traditional banking intuitions, but they’re also incredibly convenient and easy to use. 

Here at Bitcoin Depot, our mission is to bring Bitcoin to the masses. With over 8,300 Bitcoin machine locations across the U.S., Canada, and Puerto Rico, Bitcoin Depot offers you easy and convenient purchases of Bitcoin with cash. 

Get to your local Bitcoin Depot machine by finding your nearest Bitcoin Depot location and start your BTCFi journey.

*The information provided above is for informational purposes only. The inclusion of any particular 3rd party site does not imply an endorsement, sponsorship, or partnership between Bitcoin Depot and the sites listed above. While Bitcoin Depot endeavors to ensure the accuracy and relevance of the information provided, we do not guarantee the reliability of any 3rd party’s information.