By Larry Wright
While there are countless cryptocurrencies today, Bitcoin is the most commonly used. It was the first-ever cryptocurrency, but today it has the highest price in international financial markets. It is the most used type of cryptocurrency with 20 million active users all around the world. According to an estimate, almost 5% population of Europe uses Bitcoin for shopping, investment and all kinds of other activities. Although some people still do not like the idea of digital currency. But whether people like it or not, Bitcoin is not going anywhere.
Billions of other people worldwide are using cryptocurrencies for different kinds of things. The need to facilitate such a large number of people has given rise to Bitcoin ATM. At first, these Bitcoin ATMs were limited just to the UK, but now these machines are installed all over the world. But the question is what is Bitcoin ATM and its purpose, and how does it work. A Bitcoin ATM (Automated Teller Machine), which is also known as BTM (Bitcoin Teller Machine), is a unique device meant for buying or selling Bitcoin or other cryptocurrencies by the public. Just like regular ATMs are connected to bank accounts of customers, Bitcoin ATMs are connected to the internet, and it requires QR codes for sending and receiving tokens to the digital wallets of customers. They are an alternative to the banking system for cashing out or buying Bitcoin.
Different people have different opinions about them. Just like some people think that cryptocurrency is the future of physical currency, Bitcoin ATMs are the future of financial transactions. But according to some people, it is a bubble that will pop at any second.
But their popularity has increased tremendously over the past few years and has gained several investors’ trust. Some cryptocurrency investors are using it to facilitate their online and on-site transactions in order to expand their portfolios. At the same time, some are still not fully comfortable with it, even though it has been ten years since Bitcoin ATM was invented.
You can sell or buy almost all types of cryptocurrencies with Bitcoin ATMs like Bitcoin Cash (BCH), Ether (ETH), Litecoin (LTC), and Dash (DASH), along with many others.
This article will explain everything that there is to know about Bitcoin ATM. We’ll discuss a few features of Bitcoin ATMs. So, if you haven’t used a Bitcoin ATM before and want to give it a try, you should read this article. I hope that it will give you some helpful information and guide you in the right direction if you intend to sell or buy Bitcoin.
A Brief Description of Bitcoin ATM
The Bitcoin Automated Teller Machines are like average Automated Teller Machines because they are contained in a booth. But the difference is obvious: instead of carrying out the transaction of regular cash, Bitcoin ATMs carry out cryptocurrency transactions. Bitcoin ATMs allow consumers to trade Bitcoin for debit or cash. But some Bitcoin ATMs also facilitate selling Bitcoin in exchange for money.
By the looks of them, Bitcoin ATMs are also similar to the regular ATMs, but Bitcoin ATMs are ATMs with the software program meant for Bitcoin. But as we know that ATMs are often located near banks and are attached to the bank accounts of customers, Bitcoin ATMs are connected to Bitcoin wallets. Bitcoin is used as a repository instead of a bank card from where coins are debited or sent.
The Beginning of Bitcoin ATMs
Bitcoin ATMs have not been around for so long. Robocoin machine was the first cryptocurrency ATM was a, and it was opened in Waves Coffee Shop in Vancouver, Canada, on 29t of October 2013. This machine was functional till 2015 when it faced some errors due to Bitstamp. This machine is still considered the reason for the development of Bitcoin ATMs around the world. Soon after that, Bitcoin ATM was introduced in Europe. It was installed in Bratislava, Slovakia, on the 8th of December, 2013. And just a year after that United States’ first-ever Bitcoin ATM was opened in Albuquerque, Mexico, on the 18th of February, 2014. However, it functioned for just a short time and was uninstalled after a month.
Just like cryptocurrency had to face many problems when it was first launched, Bitcoin ATMs also have to face many challenges regarding specific rules and regulations. At last, the matter was settled upon reaching the decision that Bitcoin ATMs would follow the same rules and laws that regular ATMs follow.
These regulations include the fact that one person can do only a limited number of withdrawals and deposits in a single day. For example, all operators of Bitcoin ATMs in the United States must report to the Financial Crimes Enforcement Network (FinCEN) and stick to the policies of the Bank Secrecy Act’s (BAS) Anti-Money Laundering (AML) laws.
The Bitcoin ATM will also require the mobile phone number of customers for sending them verification code which depends on the amount of transactions. Before making a transaction with Bitcoin ATM, you’d also have to provide a scanned copy of an identification piece issued by the government.
In the past, Bitcoin ATMs would give their customers a chance to stay anonymous. But present-day Bitcoin ATMs do not offer that functionality because the security policies of Bitcoin ATMs require the verification of complete identification of the person making cryptocurrency transactions. The rules and regulations are even strict if there are large transactions.
Currently, 28,000 Bitcoin ATMs are present throughout the world, in which the majority is situated in the United States, and almost 90% of these Bitcoin ATMs are located in North America. The companies like General Bytes and Genesis Coin are significant producers of Bitcoin ATMs.
Mainly Bitcoin ATMs are located in shops, cafes and transport centres like airports and railway stations. If any businessman wants to have a Bitcoin ATM installed inside his commercial workplace, he would have to make an agreement with the Bitcoin ATM supplier. It would then be the supplier’s responsibility to install the Bitcoin ATM in his workplace.
Working of a Bitcoin ATM
Many people misunderstand Bitcoin ATM as trading platforms, but these two are entirely separate devices. The trading platforms are used for investment, whereas Bitcoin ATMs are meant to sell and buy Bitcoin. The consumers of Bitcoin ATM should have an account for using the machine.
There are two kinds of Bitcoin ATM, which are as follows
- Unidirectional Machines
Unidirectional machines are used for one sided transactions. They provide the function of either selling the cryptocurrency or buying the cryptocurrency.
- Bi-directional Machines
These machines provide the functionality of both selling and buying cryptocurrency.
The Bitcoin ATMs require a connection with the internet for functioning. Some Bitcoin ATMs utilize paper receipts for money transactions, but most transfer money through a general key located on the Blockchain. Bitcoin ATMs need proper identity verification while making transactions, especially large ones.
Contrary to the traditional ATMs in which physical currency is deposited and withdrawn, Bitcoin transactions are based on Blockchain technology. The cryptocurrencies are sent to the digital wallet of the customers through a QR code. Any banks like the conventional ATMs do not back Bitcoin ATMs, and for this reason, they are not controlled by any major financial institutions. But they are subjected to the same regulations as conventional banks.
Customers are also asked for scanning a QR code that is linked to the address of their digital Bitcoin wallet. After checking the code, the customer’s coins would be sent to his wallet. And after some time of processing, the record of the transaction would emerge on the customer’s wallet.
Usage of a Bitcoin ATM
A series of steps for converting your regular currency into Bitcoin through a Bitcoin ATM is below.
Step One: Enter Your Mobile Number
The first step for buying Bitcoin by making use of a Bitcoin ATM is to enter your mobile number. As we discussed earlier, before the transaction of funds, Bitcoin ATMs would require complete identity verification. For this reason, they will ask for your phone number to obtain a verification code.
In the past, Bitcoin ATMs would function for their customers to remain anonymous, but current Bitcoin ATMs have to follow Anti-Money Laundering (AML) and Know Your Customer (KYC) laws.
According to these regulations, all Bitcoin ATM customers would have to complete confirmation of their identities, such as their identity card or mobile number.
Step Two: Identity Verification
The next step is complete identity verification of customers. The Bitcoin ATM will send a verification code to the mobile numbers of customers. Upon receiving the code, the customer will have to enter that code in the machine.
The machine will then confirm the verification of the code. This step confers that customers are not providing any mobile number that does not belong to them.
Step Three: Scanning the Wallet QR Code
Having a Bitcoin address is compulsory for Bitcoin ATM to function because, your Bitcoin assets would be sent to that address. There are a few ways of getting a Bitcoin address if you don’t already have one.
- Via an address available on the platform
- Via a paper wallet
- Via a request form
Getting a QR code is essential for the representation of your Bitcoin address. The Bitcoin ATM will know which address to send your funds to when you scan your QR code. It is important to remember that Bitcoin ATM can hold up more than one wallet. So, if you are not sure about your Bitcoin wallet, it is advisable that you contact your wallet provider.
Step Four: Enter Your Regular Currency
It is now your turn to enter the amount of money you need to exchange for cryptocurrency. Just like a conventional ATM, you’ll place your cash inside the receptacle of the machine, and it will accept your cash deposits.
The Bitcoin ATM will then show you the money in Bitcoin terms. For instance, entering 400 dollars into the machine will show you that your amount equals 0.0095 BTC.
Step Five: Confirm and Finish Your Transaction
After you enter your desired number of money into the machine, the machine will prompt you the amount you entered in order to confirm whether it is the right amount or not. After checking, you’ll have to select the option “CONFIRM” or “BUY.” After the confirmation, your purchased Bitcoin will be sent to the address that you provided by your QR code.
The time limit for the transaction of Bitcoin can vary from twelve minutes to up to an hour.
Advantages of Bitcoin ATM
Some advantages of Bitcoin ATMs are given below:
- It does not require the need of bank cards or other physical cards.
- It is a relatively quick and convenient method of selling and buying Bitcoin.
- Bitcoin ATMs provide convenience to people whom do not already have a bank account and do not want one.
- In some countries, Bitcoin ATMs still offers the opportunity to remain anonymous to their customers.
- There are thousands of Bitcoin ATMs around the world, which makes them accessible for everyone.
- In the regions where only a few opportunities are available, Bitcoin ATMs provides opportunity to buy or sell cryptocurriencies, Bitcoin ATMs provide a convenient way of doing so.
Disadvantages of Bitcoin ATM
Along with advantages, Bitcoin ATMs have a few disadvantages as well:
- In some countries where the Bitcoin ATMs have to follow the KYC policy, Bitcoin transactions require complete verification of a customer’s identity, making it impossible for them to stay anonymous.
- Transaction charges of Bitcoin ATMs are incredibly high, ranging from almost 7% to nearly 12% for selling and buying Bitcoin.
- Bitcoin ATMs have limits on the amounts of transactions. The customers cannot make deposits and withdrawals of less than 1000 dollars and more than 10,000 dollars.
Location of Bitcoin Automated Teller Machines
There are almost 28,000 Bitcoin ATMs present globally, and North America has the most of them.
According to some reports of Statista, North America and Europe have the majority of Bitcoin ATMs, and they are spreading in other countries at a fast pace.
You need to look into Coin ATM Rader to find the location of your local Bitcoin ATM. The application will require you to enter your address and city, and it will tell you the location of your nearest Bitcoin ATM.
Follow the below-given steps of using a Coin ATM Radar to find the exact location of your closest Bitcoin ATM:
When you open the application of Coin ATM Radar, it will show you a map containing locations of Bitcoin ATMs from all across the world. Enter your address and city on the upper left side of the map and then select the option “Enter.” It will also give the option of conducting the search according to:
- The kind of cryptocurrency you’d like to transact, e.g. DASH, BTC, LTC, BTC, etc.
- Either you need to sell or buy the cryptocurrency.
- Which kind of machine do you require, e.g. Teller, ATM, or other.
Then select the option of “BTM LOCATION” to find the details of your nearest Bitcoin ATM. the application will give you the following information about the Bitcoin ATM:
- The name of the location or building.
- Opening and closing time.
- Types of transactions that the machine supports.
- Types of cryptocurrencies that the machine supports.
- Manufacturer and kind of machine.
The application will also help find the address of the Bitcoin ATM with the help of Google Maps. For this, you’ll have to click the option of “Get Directions” or “View Details.”
The Bitcoin ATMs are based on relatively new technology. It is still evolving in its safety measures and rules and regulations it has to follow. However, it has improved a lot since the first Bitcoin ATM was opened in 2013. Since then, the number of people using Bitcoin ATMs for cryptocurrency transactions has increased rapidly.
In United Stated, the installations of Bitcoin ATMs increased by 177% in 2020. One possible reason for that could be that nowadays, most of the general public prefers the method of cashless payment. According to Coin ATM Radar’s data about Bitcoin ATMs installations suggests that the number of Bitcoin ATMs has reached 30,000 in 2021. This data shows that how well people are adopting Bitcoin ATMs.
Various e-commerce giants are considering to install BTC ATMs in their stores as users of cryptocurrency have increased a lot in recent years. In next few years, we will see Bitcoin ATM everywhere.
Conclusion
When the first-ever Bitcoin ATM was installed in Mexico, the international price of Bitcoin was 200 dollars. Since then, its price has increased to almost 49,000 dollars, and the number of Bitcoin ATMs has grown to 30,000.
The world we live in is continually shifting from physical to digital currency. So, we can safely say that the worth of Bitcoin and other cryptocurrencies is going to increase in the future. And along with that, the popularity of Bitcoin ATMs is also growing because of their convenience and accessibility.