Cryptocurrencies are gaining popularity, and many people have adopted this new decentralized currency. People are using cryptocurrencies for their investments and day-to-day businesses transactions. This trend has led to innovation and some exciting developments in digital currencies. The growth and installation of Bitcoin ATM is one example of these developments.
What is a Bitcoin ATM?
Bitcoin ATM is an automated teller machine similar to those used in the banks for cash withdrawal. This machine is also referred to as Bitcoin Teller Machine (BTM), and it was developed to bypass the tedious old banking methods used when buying or selling Bitcoin. These machines have gained popularity among the general public alongside the increasing value and acceptance of cryptocurrencies.
These machines are equipped with QR scanners, receipt printers, and monitor to ensure security. In addition to providing convenience to Bitcoin users, these machines are used to increase familiarity and encourage many people to use Bitcoin and thus raise the number of recorded transactions in a day.
Other bank ATMs are operated by a specific financial institution and are connected to your bank accounts, but Bitcoin ATM is connected to the internet and your Bitcoin wallet. This Bitcoin wallet takes the place of a bank card, and it is a depository from which the currencies are debited or credited.
History of the Bitcoin ATM
The first cryptocurrency ATM was opened in October 2013 in the Waves coffee shop in Vancouver, Canada. It only operated for a short period and was closed in 2015 due to some operating errors. Many people recognize this machine as the first Bitcoin ATM globally despite operation errors.
Europe’s first Bitcoin Teller Machine was opened in December 2013 in Bratislava, Slovakia. United States had its first Bitcoin ATM in February 2014, situated in Albuquerque, New Mexico. However, the machine experienced several technical errors and was closed after a month of operation.
The installation and operation of Bitcoin ATMs first faced many challenges relating to regulations. Finally, unanimity was reached, and these ATMs were required to adhere to the same rules and financial rules as the old teller machined found in different financial institutions.
These laws regulated the number of withdrawals and deposits an individual could make in a day. Other laws required Bitcoin owners to adhere to the set financial rules in the country. For example, in the US, Bitcoin ATM operators were required to register and get validation from Financial Crimes Enforcement Network (FinCEN) and follow all Anti-Money Laundering rules.
Currently, there are about 28000 Bitcoin Teller Machines worldwide, and the majority of these machines are found in the United States. North America is the leading region for Bitcoin ATMs, and it harbors 90% of the world’s BTMs.
Most Bitcoin Teller Machines are found in specialty shops, cafes, and transport hubs like railway stations and airports. However, many business operators are installing Bitcoin ATMs in their business premises in recent years. However, they are required to enter into a contract with a BTM provider.
How the Bitcoin Teller Machines Work
Many people complained about the inconveniences involved in the online crypto exchange. Bitcoin Teller machines were developed to bring rationality in buying and selling bitcoin. Users of these teller machines must have a pre-existing Bitcoin wallet to use these machines.
There are two main types of Bitcoin Teller Machines, and users choose the type of machine depending on the type of transaction they want to make. These Bitcoin ATMs are:
Unidirectional ATMs: These machines allow users to make one type of transaction. Users of these machines need to choose a device that serves their needs. These machines may only enable the users to sell or buy bitcoins.
Bi-directional BTC machines are Bitcoin Teller Machines that allow users to make two different transactions. In these bi-directional machines, users can buy and sell bitcoin using the same machine without necessarily going to another machine which is the case for people who use unidirectional ATMs to make a transaction.
Advantages of the Bitcoin ATM
There are many reasons why people would choose BTM to make their bitcoin transactions. However, they choose this method over the traditional purchasing method because of convenience and ease. This method ensures a swift and safe trade, and people don’t have to worry about fraud that has been there in the cryptocurrency market.
The fact these machines are blockchain-based, they send money directly into the user’s bitcoin wallet. Moreover, these machines are decentralized, meaning financial institutions do not control them. However, even if banks or other institutions do not manage them, they must adhere to similar financial laws and regulations.
It is expected the introduction of these machines in different locations will attract many people to the cryptomarket. People who don’t want to use the tedious online bitcoin transactions will get these services from devices. Moreover, this method is fast and safe, and thus it will be suitable for people who want to transact fast.
How to Use the Bitcoin ATM Machine
The process of buying or selling Bitcoin through a Bitcoin Teller Machine is easy because it is almost similar to the way you use a bank teller machine. However, many people get confused when using these machines because of the different verification processes. Below is a guide on using these Bitcoin Teller Machines or other cryptocurrencies ATMs.
Once you start operating a Bitcoin Teller Machine, one thing you are required to do is first verify your identity. This verification process differs depending on the machine you use to make your transaction. Some verification may include a request to enter your phone number, entering your Bitcoin account password, or even a palm scan.
Choose the Type of Transaction you want to Perform
Once your identity has been verified and your wallet’s QR code scanned by the ATM’s monitor, you will need to choose the type of transaction you want to make. This process applies to the bi-directional Bitcoin machines that allow selling and buying Bitcoin. People using unidirectional BTM do not need to choose the type of transaction because it is automated in the machine.
In a bidirectional Bitcoin Teller Machine, and you wish to buy Bitcoin, you feed the amount of cash you want to spend in the Bitcoin Teller Machine. Once your amount is accepted and verified, you will be requested to open a bitcoin in your smartphone or any other electronic device you use to manage your bitcoin account.
Moreover, this machine will request to scan your wallet QR code. This code verifies your physical location where the device will send the bitcoins. It is thus essential to scan your wallet QR code when transacting with these machines, and if you are unsure about the process, you should contact your wallet provider for guidance.
If you want to sell your Bitcoin, you will scan the QR code on the ATM’s monitor, and after it is verified, you send Bitcoin from your wallet to the BTM. This process takes a short period, and after the machine verifies your transactions, money is instantly dispensed from the device.
The field of cryptocurrency is still new to many people around the world. Many people have not fully understood how cryptocurrencies function. Bitcoin Teller Machines are expected to revolutionize the cryptocurrency market. The ease and convenience of using BTM are expected to break the barriers to entry in this market.
- Pros & Cons of Using Bitcoin ATMs
- Advantages of Using a Bitcoin ATM
- Bitcoin ATMs are a Physical Gateway to the Digital Currency World
- Are Bitcoin ATMs Safe to Use?
- Bitcoin ATMs: Frequently Asked Questions